Byju's Admitted To Insolvency Proceedings On BCCI Plea

Beleaguered edtech major Byju's has been admitted to insolvency proceedings by the Bengaluru bench of the bankruptcy court. Pankaj Srivastava has been appointed as the interim resolution professional to oversee Byju's' financial restructuring during these insolvency proceedings.

The order was passed by National Company Law Tribunal in the backdrop of plea filed by the Board of Control for Cricket in India, against a default of Rs 158 crore.

The dispute revolves around Byju's' obligations under a 'Team Sponsor Agreement' dated July 25, 2019, wherein the company had exclusive rights to various marketing services. These included sponsoring the Indian cricket teams, displaying its trademarks on team kits, utilising advertising platforms during cricket events, and engaging in promotional activities with players. In exchange, Byju's was obligated to pay fees to the BCCI for these services.

Despite the agreement originally set to expire by March 31, 2023, Byju's extended its commitment through an amended bank guarantee, pushing the expiration to Sept. 15, 2023. This extension, supported by renewed guarantees filed as late as Sept. 16, 2022, indicates Byju's' ongoing sponsorship arrangements beyond the initial term.

The NCLT bench also observed the email conversations between the two parties and noted that Byju's had acknowledged the debt owed to BCCI.

Notably, during the hearings of the case, Byju's repeatedly mentioned that it is interested in referring the dispute to arbitration. However, such sentiments were not reciprocated by the BCCI.

Another point of contention that the edtech startup raised was that the amount of debt in question was disputed. However, the bankruptcy tribunal noted that it did not raise any alarm when the invoices were being released by the BCCI.

The tribunal admitted Byju's to insolvency proceedings as a result and also directed the Operational Creditor to provide Rs 2 lakh to the IRP for expenses related to issuing public notices and inviting claims, pending approval from the Committee of Creditors.

The company has made it clear in a media note that it is still pursuing ways to settle with BCCI in an amicable manner.