BCCI informs NCLAT of Rs 158 crore settlement proposal with Byju’s; US creditor alleges misuse of ‘stolen money’

The Board of Control for Cricket in India (BCCI) informed the National Company Law Appellate Tribunal (NCLAT) it has reached a settlement with Byju’s on the repayment of over Rs 158 crore due to it by the edtech company under sponsorship deals. 

The settlement plan was opposed by GLAS Trust Company LLC, one of the US-based creditors of the edtech firm, which termed the repayment ‘tainted’ and being funded with ‘stolen money’. 

The NCLAT Chennai Bench was informed on August 1 that Riju Raveendran, the brother of Byju’s founder, Byju Raveendran has paid Rs 50 crore on July 1, according to a Bar and Bench report. An additional amount of Rs 25 crore will be paid by August 2 and the remaining Rs 83 crore due will be paid by August 9, it added. 

After the submission, the Chennai Bench of the NCLAT deferred the formation of Committee of Creditors (CoC) till August 1, when the case will be heard again. 

Senior advocate Mukul Rohatgi, who represented the US-based creditor, alleged that both Byju Raveendran and Riju Raveendran conspired to siphon off over Rs 500 crore, as per the findings of a US court. 

“How can someone, who cannot even pay salaries, pay over Rs 150 crore out of the blue,” asked Rohatgi. “It is our money that has been withdrawn by these fellows,” he added. Rohatgi argued that Byju Raveendran “is a fugitive of justice” has now absconded to Dubai. 

The creditor urged the NCLAT to direct Byju’s to file an undertaking that the money being paid to BCCI is not Byju Raveendran’s. 

Solicitor General Tushar Mehta, who also appeared for the BCCI, said the creditor's concerns were based on assumptions, according to Bar & Bench. “BCCI will never condone any money that has come surreptitiously,” Mehta said. 

Counsel Arun Kathpalia, representing Byju Raveendran, sought some assurance be given to ensure that the insolvency process against Byju’s does not come in the way of the proposed settlement. 

The appellate tribunal also asked Byju’s to file an affidavit or an undertaking to clarify that money due to financial creditors will not be used to pay operational creditors (such as the BCCI). 

Last month, the Bengaluru bench of NCLT admitted BCCI’s application for initiation of corporate insolvency proceedings against Think & Learn Private Ltd, the parent company of Byju’s, for defaulting on an amount of Rs 158.90 crore. 

On July 23, Raveendran had moved the NCLAT Chennai challenging the order of the NCLT Bengaluru. 

Two days later, Raveendran filed a fresh writ petition before the Karnataka High Court seeking suspension of insolvency proceedings and a stay on the formation of the Committee of Creditors (CoC) until its appeal was decided upon by the NCLAT Chennai bench. 

The writ petition was disposed of by the High Court on July 30 after it was informed that the NCLAT had already constituted another special bench to hear the case.