A Byju’s learning centre in Mumbai. Photographer: Dhiraj Singh/Bloomberg
The Board of Control for Cricket in India (BCCI) on Wednesday informed the National Company Law Appellate Tribunal (NCLAT) that it has reached a settlement with Byju’s over payment of Rs 158.90 crore in dues owed to the cricket body by the ed-tech company. These dues are related to cricket jersey sponsorship deals.
Following the submission, the Chennai Bench of the NCLAT adjourned the formation of the Committee of Creditors (CoC) till August 1, when the case will be heard again. The Bench did not issue an order on the matter as a group of US-based lenders opposed the deal, claiming that the money belongs to them and not to Byju Raveendran.
According to legal platform Bar & Bench, the NCLAT informed that Riju Raveendran, brother of Byju’s founder, had paid BCCI Rs 50 crore on Tuesday. The appellate court was also informed that an additional Rs 25 crore will be paid by Friday (August 2) and the remaining amount by August 9.
Byju’s US-based lenders strongly opposed the deal. They told the NCLAT that the payment is tainted and is being funded by stolen money. Senior advocate Mukul Rohatgi, appearing for the lenders, claimed that both Byju Raveendran and Riju Raveendran conspired to siphon off over Rs 500 crore, according to findings by a US court.
“How can someone who cannot even pay his salary pay over Rs 150 crore out of nowhere?” Rohatgi asked. “It is our money that these guys have taken away,” he added.
To support his allegations, Rohatgi read out excerpts from a judgment passed by a Delaware court in a bankruptcy case against Byju’s US entity, Byju’s Alpha. He alleged that amid a financial crisis, Byju Raveendran has fled to Dubai.
US lenders have alleged that Byju’s founders illegally siphoned off $533 million in loan funds, the whereabouts of which remain unknown.
When NCLAT asked Rohatgi whether he assumed that the amount paid to BCCI was part of the missing $533 million, he said “yes” and questioned whether the money had been taken from an official bank account.
The missing money is at the heart of a fight between the US lenders and Think & Learn, the parent company of Byju’s learning app. The two sides are battling it out in courts in Delaware and New York, according to a Bloomberg report.
Solicitor General Tushar Mehta, who also appeared for the BCCI, said the creditors’ concerns were based on assumptions, according to Bar & Bench.
The lenders have urged the NCLAT to direct Byju’s to submit an undertaking that the money being paid to BCCI is not that of Byju Raveendran.
Byju Raveendran’s lawyer Arun Kathpalia responded that some assurance should be given to ensure that the insolvency proceedings against Byju’s do not hamper the proposed deal.
The NCLAT asked the interim resolution professional (IRP), appointed to oversee the insolvency proceedings against Byju’s, whether the constitution of the committee of creditors (CoC) could be stayed. The appellate court then adjourned the hearing till August 1. It also asked Byju’s to file an undertaking to clarify that the money owed to financial creditors will not be used to pay operational creditors (like BCCI).
On July 16, the National Company Law Tribunal (NCLT) admitted Byju’s to the Corporate Insolvency Resolution Process (CIRP) based on a petition filed by BCCI due to unpaid debts amounting to Rs 158.90 crore.
Due to the NCLAT order, Byju Raveendran lost immediate control of the company. The court appointed a bankruptcy professional to oversee the day-to-day operations during the process. On July 23, Byju Raveendran moved the NCLAT for an urgent hearing on the matter.
First published: July 31, 2024 | 19:13 IS
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