Would have emerged from insolvency if IRP acted on time: Byju's tells NCLAT

Byju’s would have emerged from insolvency had the interim resolution professional (IRP) not delayed submitting the Board of Control for Cricket in India’s (BCCI) application that was filed after the settlement, Byju’s founders told the National Company Law Appellate Tribunal (NCLAT) Chennai bench.

 

The appellate tribunal was hearing an appeal from Byju’s co-founder Riju Raveendran against a decision of the National Company Law Tribunal (NCLT) Bengaluru that blocked the withdrawal of insolvency proceedings against the edtech company.

 

The case revolves around a settlement between Think & Learn Pvt. Ltd. (TLPL), the parent company of Byju’s, and BCCI, which had initiated an insolvency process over unpaid sponsorship dues of Rs 158 crore in July 2024.

 

“There was a settlement (with BCCI), that settlement was before the Committee of Creditors (CoC) was being constituted,” said Arun Kathpalia, the senior advocate appearing for Raveendran.

 

According to the appeal, Byju’s promoters had settled with BCCI in August 2024, depositing the full settlement amount in escrow. However, US-lender GLAS Trust Company LLC, claiming to represent term-loan lenders owed approximately $1.2 billion, intervened to block the withdrawal, the promoters told the appellate tribunal.

 

A key issue in the appeal is the procedurally improper formation of the Committee of Creditors (CoC) under GLAS’s influence. The appeal claims that instead of forwarding BCCI’s withdrawal application to the NCLT within the required three days, the IRP was pressured to delay the filing and hastily constitute a CoC that included GLAS as a financial creditor.

 

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

 

The appeal also raised concerns over the legitimacy of the CoC’s composition.

 

The NCLAT will continue hearing the case on Thursday.

 

During the hearing on Monday, Riju Raveendran’s attorney told the appellate tribunal that Raveendran had paid Rs 158 crore from his own funds to settle the dispute with BCCI and therefore the money should be kept outside the scrutiny of its committee of lenders.

 

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

 

On February 10, the Bengaluru bench of the 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 with BCCI was 'tainted' money.