The National Company Law Tribunal’s (NCLT) Bengaluru bench on Tuesday admitted a plea by the Board of Control for Cricket in India (BCCI) seeking insolvency proceedings against edtech startup Byju’s.
The BCCI filed an appeal with the tribunal after Byju’s allegedly defaulted on a payment of ₹158 crore under their sponsorship contract for the Indian cricket team.
The NCLT has appointed Pankaj Srivastava as an interim resolution professional and called for progress reports every two weeks, reported Bar and Bench. The tribunal also dismissed an application by Byju's to refer the matter to arbitration.
Byju’s has had branding tie ups with BCCI, the International Cricket Council (ICC), and the Federation Internationale de Football Association (FIFA). Byju’s was also the official sponsor of the FIFA World Cup 2022 in Qatar. Amid layoffs in 2022, Byju’s had roped in football star and global sports icon Lionel Messi as the first global brand ambassador of its social impact arm, Education For All.
Once valued at a staggering $22 billion, Byju’s has seen its valuation vanish recently. Prosus wrote off its entire 9.6% stake in the edtech company. In January, U.S.-based asset manager BlackRock slashed the implied valuation of the Indian startup by 95% to $1 billion.
The cash-strapped startup delayed paying salaries of its employees earlier in March due to a severe cash crunch. At the time, the edtech company blamed “misguided foreign investors” including Peak XV Partners, General Atlantic and Prosus for the delay.
Byju's investor board members from Prosus, Peak XV, and Chan Zuckerberg Initiative had stepped down last year.
The edtech starup grew rapidly on the back of an acquisition spree. It shelled out $2.5 billion on acquisitions that included Aakash Educational Services, U.S.-based Epic, kids' coding platform Tynker, professional education firm Great Learning and exam prep platform Toppr.
But when the funding dried up, it resorted to layoffs. The startup laid off over 10,000 employees in the last two years.
Byju's statutory auditor Deloitte Haskins & Sells quit last year citing a long delay in the edtech startup's financial statements for the year ended March 31, 2022. Following the auditor's resignation, Byju's appointed BDO (MSKA & Associates) as its new auditor.
In April, Arjun Mohan left Byju's less than six months after joining as CEO. To take the company out of the crisis, founder Byju Raveendran has said he will spearhead the daily operations at BYJU's India.
The three board members of the edtech firm—Byju Raveendran, his wife Divya Gokulnath and brother Riju Raveendran—currently hold around 26% stake in the company.
Last year, the Enforcement Directorate (ED) conducted searches at the premises of Byju’s and the residence of Raveendran and seized documents pertaining to investments received and made by the company.
