French digital services company Teleperformance files insolvency plea against Byju's

Second insolvency plea filed in NCLT Bengaluru against Byju's

France-based Teleperfomance Business Services on January 25 filed an insolvency plea at the National Company Law Tribunal (NCLT) in Bengaluru against Ed tech giant Byju's, for recovery of its dues.

This is the second plea to be registered at NCLT against Byju's, the first being the plea filed by the Board of Control of Cricket in India (BCCI) in November 2023.

According to NCLT's website, though Teleperformance had initially filed the plea on November 4, 2023, it had managed to get it registered at the NCLT only on January 25.

Byju's used to avail of services from outsourcing agencies including Teleperformance, Cogent E Services, and iEnergizer till mid-2022. The three companies provided calling agents to Byju’s. The company has discontinued services from Teleperformance and Cogent E Services in an attempt to slash costs. As a result, the company’s business process outsourcing expenses went down to zero in December 2023 from over Rs 4.49 crore a year earlier.

Teleperformance provides services for debt collection, telemarketing, customer relationship management, content moderation, and communication.

In a separate development,  Moneycontrol was informed that foreign lenders, who collectively extended more than 85 percent of Byju’s $1.2 billion term loan, have filed an insolvency petition against the online tutor in India.  The bankruptcy petition was filed earlier this week in the Bengaluru bench of the NCLT.

There are two kinds of creditors under IBC: operational creditors (OCs), and financial creditors (FCs). OCs are those who provide goods and services to a business but have not been paid, FCs are those who lend money to the company.

While Byju's lenders are likely to be classified as FCs, Teleperformance is likely to be classified as an OC.

Byju's VS BCCI:

In November 2023, NCLT issued a notice in a plea by BCCI against Byju's.  BCCI claimed that Byju's had defaulted on a payment of Rs 158 crore. “It is stated that the General notice was issued to BYJU’s vide email dated 06.01.2023 and the default amount of Rs.158 crore. excluding TDS as reflected,” the NCLT order read.

Byju's previously had three significant branding partnerships with the BCCI, ICC (International Cricket Council), and FIFA (Federation Internationale de Football Association), all of which were up for renewal in 2023. However, the company confirmed earlier in the year that it would not renew any of them. It remains unclear whether the filed suit is related to this matter or another issue.

BCCI's case is expected to come up for a hearing on February 7, 2024.