Byjus BCCI case: Karnataka HC rejects Byju’s plea in BCCI case; edtech firm to move NCLAT on Monday

Troubled edtech firm Byju’s on Friday moved the Karnataka High Court challenging the National Company Law Tribunal (NCLT) order on the Board of Control for Cricket in India’s (BCCI) insolvency plea, but the court did not admit the plea, sources aware of the matter said.

The edtech plans to approach the National Company Law Appellate Tribunal (NCLAT) again on Monday, sources added.

On July 16, ET reported that the NCLT had admitted Byju’s parent company, Think and Learn Pvt Ltd, into insolvency over unpaid dues of Rs 158 crore related to sponsorship rights from the BCCI.

According to a Reuters report, founder Byju Raveendran stated that the insolvency process will likely cause vendors who provide essential services for Byju’s online platforms to declare a default, leading to a total shutdown of services and halting operations.

Also read | Byju’s faces total shutdown if insolvency proceeds: CEO Byju Raveendran

A spokesperson for Byju’s declined to comment.

As a result of the earlier NCLT order, the current management of the edtech firm stands automatically suspended.

Further, cash-strapped Byju’s assets will be protected under a moratorium, blocking any transfer or sale of its assets and the institution of any new suits against it. This will have an impact on the other pending cases against Byju’s before the tribunal.

In March 2019, Byju’s had initially signed a jersey sponsorship agreement with the BCCI for three years. It was later extended by one year.

The edtech firm had made the payments till September 2022. The current dispute relates to the payments from October 2022 to March 2023.

Additionally, the edtech firm is fighting a legal battle in the Karnataka High Court against a group of investors, including Peak XV Partners and Prosus, over an extraordinary general meeting (EGM) aimed at removing chief executive Raveendran.

On June 23, Byju’s filed a petition at the Karnataka HC challenging the NCLT order that prevents the company from proceeding with its second rights issue.

The NCLT, in an order dated June 12, had directed Byju’s to maintain the status quo in its shareholding, in turn pausing its contentious rights issue.

On June 24, ET reported that Prosus had written off its remaining 9.6% stake in Byju’s. With this, the Dutch-listed technology investment firm has written off 100% of its investment in the edtech firm.