Once India’s biggest startup, Byju’s faces insolvency proceedings

1:11 am Wednesday, July 17th, 2024

By Indranil Sarkar and Arpan Chaturvedi

BENGALURU/NEW DELHI (Reuters) -Edtech company Byju’s, once India’s biggest startup valued at $22 billion, will face insolvency proceedings for failure to pay $19 million in dues to the country’s cricket board, a tribunal said on Tuesday.

Byju’s has suffered numerous setbacks in recent years, including boardroom exits and a tussle with investors who accused CEO Byju Raveendran of corporate governance lapses, job cuts and a collapse in its valuation to less than $3 billion. Byju’s has denied any wrongdoing.

A ruling by India’s companies tribunal on Tuesday, following a complaint by the Board of Control for Cricket in India (BCCI), initiated insolvency proceedings.

These will include the appointment of an interim resolution professional, Pankaj Srivastava, who will oversee the management of Byju’s as the company’s board of directors is suspended as per law.

CEO Raveendran will report to the resolution professional and the company’s assets will remain frozen while the proceedings continue.

In a statement, Byju’s said it wishes to “reach an amicable settlement with BCCI and we are confident that, despite this order, a settlement can be reached.”

The company’s lawyers are reviewing the order and will take necessary steps to protect the firm’s interests, it added.

Byju’s, which operates in more than 21 countries, became popular during COVID-19 pandemic by offering online education courses. It also offers offline coaching classes.

In February, a group of Byju’s investors including Prosus and Peak XV voted to oust Raveendran, a move which Byju’s has called invalid.

The companies tribunal said in its order “it cannot be disputed” that the parent of Byju’s, Think & Learn Private Limited, had availed itself of the services of the BCCI and had defaulted on roughly $19 million in dues.

Delhi-based lawyer Bishwajit Dubey said Byju’s controlling shareholders can either appeal the insolvency initiation legally or quickly settle the dispute with the cricket board to resolve the matter.

The BCCI declined a Reuters request for comment.

(Additional reporting by Manvi Pant in Bengaluru; editing by Aditya Kalra, Mark Potter and Jason Neely)