The Supreme Court has stayed the NCLAT order allowing BYJU’S to pay Rs 158 crore to settle its debts to the Board of Control for Cricket in India (BCCI). The court termed the NCLAT order as “inadmissible” and is scheduled to hear the case on August 23.
The petition before the Supreme Court filed by Glas Trust Company LLC seeks to direct BCCI to hold ₹158 crore in a separate escrow account.
In February this year, US-based non-bank lending agency Glas Trust Company LLC filed an insolvency petition in NCLT Bengaluru against BYJU’S. Glas Trust is the agent of the foreign lenders who have collectively provided 85% of BYJU’S’s $1.2 billion term loan.
On August 2, the NCLAT granted BYJU’S the extension. The settlement between the edtech company and BCCI resulted in the closure of insolvency proceedings against BYJU’S, providing much-needed relief to the company.
The appellate court’s decision set aside the National Company Law Tribunal’s (NCLT) earlier order that had ordered initiation of insolvency proceedings against BYJU’S. The appellate court stipulated that if BYJU’S failed to honour its undertaking to pay the dues by August 9, the insolvency proceedings would be resumed.
The NCLAT also dismissed allegations that loans granted in the US had been used to settle debts owed to BCCI, saying the US lenders had not produced evidence to corroborate these claims. The court stressed that the source of the funds provided by Byju’s co-founder Riju Raveendran was not in question.
In fact, earlier this month, the Delaware Bankruptcy Court rejected GLAS Trust Company’s attempts to impede the company’s recovery efforts. The Delaware court denied GLAS Trust Company’s request, which was supposedly representing the consortium of foreign lenders, for a temporary restraining order aimed at blocking the BCCI deal.
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