Byju Raveendran on the brink of losing control over his company?

Byju Raveendran is reportedly on the brink of losing control over his company, Byju's, after the National Company Law Tribunal (NCLT) greenlit insolvency proceedings against the edtech giant. 

NCLT has appointed an interim resolution professional to replace Raveendran, following a petition from the Board of Control for Cricket in India (BCCI), a former sponsor. The move has opened the floodgates for other creditors, employees, and vendors to file claims, with the court stating that the "existence of a debt and a default in the payment of debt is clearly established."

It effectively means that control of Byju’s is lost by the founders and existing Board of Directors, Satwinder Singh, managing partner at Aekom Legal was quoted as saying in a Bloomberg report.  The resolution professional is made responsible for carrying out the operations of the company and keeping it as a going concern until the insolvency process is complete.

Once valued at $22 billion, Byju’s has been battling financial and legal woes as its business dwindled. The plea from BCCI is among several bankruptcy cases the company is facing both in India and abroad. Despite the grim scenario, Byju’s has the option to appeal the decision and could potentially halt the insolvency proceedings with a successful stay order.

Employees of the firm have claimed that despite pay slips indicating tax deductions, the company has failed to remit these taxes to the government since July last year. A group of employees, according to reports,  is planning to take Byju’s to the NCLT. Byju’s also has allegedly not deposited monthly provident fund payments for many employees since December.

Bloomberg claims the resolution professional will most likely push for a  committee that will determine the company’s future. “We wish to reach an amicable settlement with BCCI and are confident that, despite this order, a settlement can be reached,” a Byju’s spokesperson stated. “Our lawyers are reviewing the order and will take necessary steps to protect the company’s interests.”

If Byju’s manages to settle its dues, BCCI can withdraw its application, or Byju’s can propose a settlement plan that must be approved by 90% of the creditors' committee, Sumit Binani, an independent insolvency professional, told Bloomberg. Given the company’s tech-based nature, tangible asset value may be minimal, but there remains potential interest in the brand itself.