BYJU'S to challenge NCLT's insolvency proceedings order against it?

The National Company Law Tribunal (NCLAT), Bengaluru bench, on Tuesday, July 17, admitted an insolvency petition filed by the Board of Control for Cricket in India (BCCI) against EdTech firm BYJU'S over a Rs 158 crore debt.

BYJU'S, which reached its peak valuation of $22 billion in 2022, has to face insolvency proceedings. The bench has appointed Pankaj Srivastava as an interim resolution professional to oversee the functions of the company, stated a report by The New Indian Express.

According to sources, BYJU'S is planning to challenge the order at National Company Law Appellate Tribunal (NCLAT).

"As we have always maintained, we wish to reach an amicable settlement with the BCCI and we are confident that, despite this order, a settlement can be reached. In the meantime, our lawyers are reviewing the order and will take necessary steps to protect the Company's interests," a spokesperson from BYJU'S said.

Both BCCI and BYJU'S entered into a team sponsor agreement in 2019, and in 2022, BYJU'S made payment in full only against one invoice for the year 2022-2023. The EdTech firm failed to make payments against the remaining invoices raised by the BCCI for the financial year 2022-23.

The NCLAT also dismissed an application by the EdTech firm to refer the matter to arbitration.

"It is abundantly clear as laid down by the Hon'ble Apex Court that the Adjudicating Authority has to either reject or Admit the Application and cannot postulate a third option. In this matter, the application U/s 9 of the IBC has been admitted by the Order passed today, therefore, the application for referring the matter for Arbitration is not maintainable," the order said.

Apart from BCCI, Oppo has also filed an insolvency plea against the firm. The EdTech company has settled an insolvency case with Surfer Technologies and Teleperformance recently.

Previously the NCLAT had issued notices to BYJU'S parent Think and Learn in three cases due to claims of unpaid dues.

Publishing company McGraw Hill, BPO service provider Cogent E-services and supplier of automation control products AG Automation had filed cases against BYJU'S.

Meanwhile, many employees of the EdTech firm said that the company has not remitted TDS (Tax Deducted at Source) to the government for many months now.

Sources from BYJU'S said the company is trying its best to remit TDS and it might take many days as the company is grappling with a severe cash crunch.