Settlement with BCCI outside lenders' scrutiny, Byju's Raveendran to NCLAT

Suspended director of Byju’s, Riju Raveendran, told the National Company Law Appellate Tribunal (NCLAT), Chennai, on Wednesday that the edtech firm's settlement of Rs 158 crore with the Board of Control for Cricket in India (BCCI) should be kept outside the scrutiny of its committee of lenders.

 

Riju, the younger brother of founder Byju Raveendran, told the appellate tribunal that the settlement with BCCI had been finalised before the committee of creditors (CoC) was formed.

 

The appellate tribunal, however, refused to accept Riju’s plea and said it will now hear the matter on March 3.

 

A committee of creditors is a group of financial creditors or lenders who represent a company in the insolvency process.

 

On February 10, the Bengaluru bench of the National Company Law Tribunal (NCLT) had directed BCCI to submit the Rs 158 crore settlement plea before the CoC. If accepted, Byju’s could exit insolvency proceedings.

 

However, lenders, which include US-based Glas Trust and Aditya Birla Finance, opposed this, saying the settlement money with BCCI was "tainted" money.

 

BCCI and Byju’s both opposed this, saying the settlement money was "clean," tax-paid money.

 

Riju had also challenged a January 29 order of the NCLT. The NCLT had ordered disciplinary action against resolution professional (RP) Pankaj Srivastava and rejected his decision to exclude Glas Trust and Aditya Birla Finance from the committee of creditors (CoC) of the edtech firm.

 

Both Glas Trust and Aditya Birla Finance were part of the CoC in August last year but were later removed from the reconstituted committee. Aditya Birla Finance alleged that the RP had wrongfully classified it as an "operational creditor" instead of a financial creditor or lender, while Glas Trust said it was wrongfully ousted from the CoC.

 

NCLAT had on February 7 directed the NCLT to decide on BCCI's application within a week, which is this week.