- Settlement could lift Byju’s from the ongoing insolvency proceedings that have beset the company and frozen the assets of what was once the nation’s largest startup.
- National Company Law Appellate Tribunal will hear all the applications on July 31.
- NCLT’s order has placed protective measures over Byju’s assets, preventing any transfer or sale during the ongoing legal scrutiny.
The Indian edtech giant Byju’s is on the brink of an agreement to resolve a $19 million payment dispute with the Board of Control for Cricket in India (BCCI).
The potential settlement, if finalised, could lift Byju’s from the ongoing insolvency proceedings that have beset the company and frozen the assets of what was once the nation’s largest startup.
The BCCI has communicated with the National Company Law Appellate Tribunal (NCLAT) regarding initial discussions aimed at resolving the conflict stemming from Byju’s sponsorship obligations.
Byju’s entered into a jersey sponsorship agreement with the BCCI in March 2019 for a three-year term, which was later extended for an additional year. Although the company met its payment obligations until September 2022, the dispute arises from unfulfilled payments for the period spanning October 2022 to March 2023.
The gravity of the situation escalated when an Indian tribunal initiated insolvency proceedings against Byju’s following the BCCI’s complaints regarding the company’s inability to meet its payment obligations.
The rise of Byju’s has been meteoric, with its valuation at $22 billion in 2022.
However, the company has faced numerous challenges, including leadership changes, investor disputes, and job cuts, resulting in a staggering decline in valuation to less than $3 billion. Despite these issues, Byju’s has denied any wrongdoing.
In response to the legal and financial pressures, Byju’s has committed to settling the outstanding payment to the BCCI in three installments, beginning with an upfront payment of Rs500 million (approximately $6 million).
Discussions between the two parties are reportedly ongoing as they work towards a resolution.
The tribunal agreed to hear all the applications on July 31.
However, a tangled web of legal challenges remains, with Byju’s founder, Byju Raveendran, contesting the insolvency proceedings in court.
Amidst these proceedings, concerns have been raised regarding the cooperation of Byju’s former management with the interim resolution professional tasked with overseeing the company’s operations. The NCLT’s order has placed protective measures over Byju’s assets, preventing any transfer or sale during the ongoing legal scrutiny.
As the situation unfolds, the implications for Byju’s future remain closely monitored by stakeholders across sectors.