Suspended directors of the bankrupt edtech company Byju’s have appealed to the National Company Law Appellate Tribunal (NCLAT), contesting a Bengaluru insolvency court’s ruling that reinstated its lenders as financial creditors while neglecting to address a ₹158 crore settlement with the Board of Control for Cricket in India (BCCI). The petition, submitted by suspended director Riju Raveendran and current resolution professional Pankaj Srivastava to the Chennai bench of NCLAT, claims that the National Company Law Tribunal (NCLT) had reserved its January 29 order regarding both the settlement approval and the lenders’ challenge. However, the tribunal only addressed the lenders’ request, leaving the settlement unresolved.
The directors have also raised concerns about the tribunal’s decision to remove the current resolution professional, appoint a new RP, and reinstate a Committee of Creditors (CoC) that includes Aditya Birla Finance Ltd and Glas Trust Co. LLC. Senior advocate Arun Kathpalia, representing the directors, suggested that the tribunal’s decisions may indicate a potential “nexus” that could harm the company. Byju’s is now seeking a special NCLAT bench to hear its case, with the appellate court scheduled to review the plea on February 6.
The significance of the settlement lies in the fact that had the NCLT approved Byju’s settlement with BCCI, the company could have exited insolvency immediately, allowing founder Byju Raveendran to regain control. However, the tribunal’s ruling has kept the insolvency process active, preventing the Raveendran brothers from managing the company.
Currently, the CoC in Byju’s insolvency proceedings is largely controlled by Glas Trust, which holds a 99.41% voting share due to its substantial ₹11,432 crore claim. Aditya Birla Finance and Incred Financial Services hold much smaller stakes, with claims of ₹47 crore (0.41% voting share) and ₹20 crore (0.18% voting share), respectively. ICICI Bank has no verified claims or voting rights.
The NCLT initiated insolvency proceedings against Byju’s on June 16, 2024, after the company defaulted on ₹158 crore owed to the BCCI under a sponsorship agreement. Byju’s had entered into this agreement in 2019, securing jersey sponsorship rights for the Indian cricket team. The contract was extended until November 2023, but when the company failed to fulfill its financial obligations, the BCCI petitioned the NCLT for insolvency proceedings. Both parties later sought court approval for a settlement, but the NCLT did not issue an order, leading Byju’s to escalate the matter to the NCLAT in Chennai.
However, the Supreme Court had previously quashed an earlier settlement on October 23, ruling that it did not adhere to due process under the Insolvency and Bankruptcy Code (IBC). The court instructed both parties to return to the NCLT.
