BCCI Files Insolvency Plea against Byju's for Recovering Rs158 Crore Payment

Moneylife Digital Team 04 December 2023

Economy & Nation

The Board of Control for Cricket in India (BCCI) has filed a plea before the Bengaluru bench of the National Company Law Tribunal (NCLT) against Think & Learn Pvt Ltd (Byju's) to recover its dues worth Rs158 crore. The petition is filed under Section 9 of the Insolvency & Bankruptcy Code (IBC).

BCCI informed the bench that it sent a notice to Byju's in January this year for payment of Rs158 crore, excluding tax deducted at source (TDS).

The NCLT bench, while issuing a notice, directed Byju's to reply within the next two weeks. The next hearing in the case is scheduled on 22 December 2023.

According to a report from Times of India (ToI), the amount BCCI is seeking from Byju's is related to a contract to sponsor the jerseys for the Indian cricket team. The contract ended in March 2022.

"All payments up to this period had been made by Byju's. At this time, BCCI had asked the company, which was once the most valuable startup, to continue till it found a new sponsor. Amid a funding winter, Byju's wanted to exit but BCCI persuaded it to stay on for a little more time. So, in June, Byju's extended its jersey sponsorship agreement with the board until November 2023 for an estimated US$35mn (million)," the report says.

A spokesperson for Byju’s told the newspaper that the company is in discussion with BCCI to settle the matter.

Byju's has been in financial trouble for the past several months mainly due to high-value acquisition and lack of funding.

According to reports, some employees of Byju's have not received their salaries, with the company blaming it on a technical glitch. The salary delay for about 1,000 employees appears to have affected people across levels. However, employees affiliated with Akash Institute have not been impacted.

Byju's reportedly paid the November salaries of some of its employees after the 'technical glitch' that had hampered the payment of some 1,000 workers.

Last month, the adjudicating authority of the enforcement directorate (ED) issued show-cause notices to the ed-tech firm and its founder, Byju Raveendran over an alleged violation to the tune of Rs9,362.35 crore under the Foreign Exchange Management Act (FEMA).

In April 2023, ED conducted searches at the premises of Think and Learn and the residence of Byju Raveendran and seized documents about all investments received by the company as well as documents of the overseas investments made by it.

"On conclusion of the investigation, it was found that Think and Learn Private Limited and Byju Raveendran have contravened the provisions of FEMA by failing to submit documents of imports against advance remittances made outside India, by failing to realize proceeds of exports made outside India, by delayed filing of documents against the Foreign Direct Investment (FDI) received into the company, by failing to file documents against the remittances made by the company outside India and by failing to allot shares against FDI received into the company," the ED says. (Read: ED issues show cause notice to Byju Raveendran in FEMA violation case)

An official from Byju's told IANS that the queries received in the notice are solely technical in nature such as delay in filing annual performance reports (APRs) with respect to duly compliant overseas direct investment (ODI) of close to Rs8,000 crore that arose from the delayed statutory audit (FY21-22).

Comments

User

pallavoorsubramanian

1 year ago

Byju's is in the news more for its violating every possible law and commitments than for good governance and practices. It is a classic case for all startups on how not to run an organization and court trouble. Less said about the regulator, the better. So long as such bodies exist, the culprits will have it easy and buy time.

yerramr

1 year ago

When the petition is filed in January 2023, Why would it take eleven months for the NCLT to issue the notice. Such delays should be reduced to no more than a month mandatorily when alone IBBI existence makes sense.