Edtech company Byju’s will no longer face bankruptcy cases. The National Company Law Appellate Tribunal (NCLAT) on Friday approved the agreement between Byju’s parent company ‘Think and Learn’. And the Board of Control for Cricket in India (BCCI).
The agreement was reached between the two parties on July 31. The edtech startup has agreed to pay BCCI the outstanding sponsorship contract amount of Rs 158 crore. Byju’s has to pay this amount today (Friday, August 2) and on August 9.
The company’s control is back with Byju Ravindran
NCLAT has suspended the July 16 order of the National Company Law Tribunal (NCLT), which ordered the initiation of bankruptcy proceedings against the company. However, after today’s decision, the control of the company will now return to Byju Ravindran.
After the July 16 NCLT order, control was taken from Byju Ravindran and the company’s board. According to the Insolvency and Bankruptcy Code (IBC) 2016, when bankruptcy proceedings are initiated against a company, the control of the company is taken away from its board.
Byju’s: Petition of American lenders rejected
The agreement between BCCI and Byju’s was opposed by the American lenders who had given loans to Think and Learn. However, NCLT found that this agreement between the two parties was made in front of the Committee of Creditors (CoC) i.e. those who invested in the company. Also, the source of the amount to be given under the agreement is also appropriate.
US based lenders had raised questions on the agreement…
- Lenders had asked NCLAT not to accept the agreement.
- Their lawyer Mukul Rohatgi had called it a ‘tainted agreement’.
- Rohatgi had said – payments are being made from ‘stolen money’.
- Byju and Riju conspired and stole 500 million dollars.
- Lenders had said that this is our money, which these people have withdrawn.
Byju’s: Ravindran’s brother said he will pay from personal funds
On Wednesday (July 31), the company’s founders’ lawyer Arun Kathpalia told NCLAT that Byju Ravindran’s brother Riju had made a payment of Rs 50 crore to BCCI on July 30 itself.
Of this, Rs 25 crore will be paid on August 2 and the remaining Rs 83 crore will be paid by August 9. Riju Ravindran said that the settlement amount is his personal fund. It was raised by selling the company’s shares between 2015 and 2022.
NCLAT said – action will be taken on violation of the agreement
Accepting the agreement, NCLAT said, ‘On the basis of the undertaking and affidavit given by both the parties, the agreement is approved and the order (bankruptcy proceedings) is cancelled. However, in case of violation of the terms of the agreement, insolvency proceedings will be initiated.’
The sponsorship contract was signed in 2019
Byju’s parent company Think and Learn Private Limited. And BCCI had signed a sponsorship contract for Team India’s jersey in 2019.
