Byju’s, the Indian edtech firm once valued at $22 billion, is facing a major challenge to its survival. The company’s parent entity, Think and Learn Pvt Ltd, will challenge insolvency proceedings against it this week, according to two sources. This move follows a directive by the National Company Law Tribunal (NCLT) in Bengaluru on Tuesday, ordering insolvency proceedings due to Byju’s failure to pay $19 million (Rs 158 crore) in dues to the Board of Control for Cricket in India (BCCI). The BCCI filed a complaint against Byju’s after the company missed its payment deadline in September 2022.
A court-appointed professional currently oversees the company’s operations. Byju’s has encountered numerous setbacks in recent years, including boardroom exits, investor disputes, job cuts, and a significant decline in valuation to less than $2 billion. Despite these challenges, Byju’s has maintained its stance, denying any wrongdoing.
The company is pursuing two tracks to resolve this situation. Sources indicate that an appeal will be filed with the companies law appeals tribunal this week to challenge the insolvency proceedings. Simultaneously, Byju’s is actively engaged in settlement talks with the BCCI, aiming to reach an amicable solution. However, Byju’s primary focus is on blocking the insolvency process, according to one source.
The BCCI’s legal counsel informed the tribunal in November 2022 that a notice had been issued to Byju’s on January 6, 2023, regarding the unpaid amount, excluding tax deducted at source (TDS). This dispute stems from a jersey sponsorship agreement between Byju’s and the BCCI, which commenced in March 2019 and concluded in September 2022. The unpaid amounts relate to the period between October 2022 and March 2023.
Despite the looming insolvency proceedings, Byju’s has previously expressed its desire to reach a mutually agreeable settlement with the Indian cricket board. The company’s next steps in this legal battle will determine its fate and its ability to overcome this financial crisis.
