As NCLT acknowledges insolvency resolution, creditors may seize control of Byju’s
The Indian Cricket Board has filed a plea, forcing Byju’s—once the most valuable Indian startup—to go through the insolvency resolution process at the National Company Law Tribunal (NCLT).
In accordance with section 9 of the Insolvency and Bankruptcy Code (IBC) 2016, which enables creditors to unseat the company’s current management, the Board of Control of Cricket in India (BCCI) filed. Byju’s was found to have missed a November 2023 NCLT order payment of Rs 158 crore.
Pankaj Srivastava has been appointed by NCLT as the professional in charge of interim resolution. He will oversee Byju’s until the lenders establish a committee that will be called the Committee of Creditors.
“The Interim Resolution Professional shall after collation of all the claims received against Think and Learn Pvt Ltd the Corporate Debtor and the determination of the financial position of the Corporate Debtor constitutes a Committee of Creditors,” the arbitrator order said.
According to the NCLT order, Byju’s has established defaults, so the Bengaluru-based edtech company has no reason to prevent BCCI from initiating the Corporate Insolvency Resolution Process (CIRP) against it.
For the past few years, Byju’s has been experiencing chaos. In the last 12 months, the company has already experienced a funding crisis and a board and upper management exodus. The company’s chief financial officer, Ajay Goel, departed in October 2023, and its chief executive officer for India, Arjun Mohoan, submitted his resignation in April of this year. In July of this year, T V Mohandas Pai and Rajnish Kumar also departed the company as advisors.
The value of investment firm Prosus’s 9.6% stake in Byju’s was written off last month. Prosus has invested approximately $500 million in the company over the years. This occurred shortly after Byju’s raised a $200 million rights offering at a $225 million valuation. At this price, it is valued at 99% less than its $22 billion peak.
According to Forbes Billionaire Index 2024, the founder of Byju, Raveendran, also lost all of his money.
