Supreme Court Overturns Byju's BCCI Settlement Of Rs 158.9 Crore.
The Supreme Court of India has reversed a tribunal order approving Byju’s Rs 158.9 crore dues settlement with the Board of Control for Cricket in India (BCCI) on Wednesday. Byju’s was undergoing insolvency proceedings due to unpaid sponsorship dues to the BCCI. This decision is a major setback for Byju’s founder Byju Raveendran who had regained control of the company earlier this month. The Supreme Court led by Chief Justice DY Chandrachud along with Justices JB Pardiwala and Manoj Misra reopened the case today and reversed a tribunal order approving Byju’s Rs 158.9 crore settlement.
This insolvency proceedings against Byju’s which is an ed-tech company was based on the case after a US-based lender, Glas Trust Company LLC challenged a settlement between Byju’s and BCCI. Byju’s owed the BCCI Rs 158.9 crores from a sponsorship deal but he failed to pay. Byju’s had a sponsorship deal with the BCCI to display their brand on the Indian cricket team’s kit and access tickets to matches. Despite meeting initial payments, Byju’s missed subsequent payments which led to a major shortfall.
Also, read| Byju Raveendran Finally Broke Silence, Explains Missing $533 Million Amid Fraud Allegations
Later, Riju Ravindran the brother of Byju’s founder Byju Raveendran agreed to pay the BCCI using his personal funds from selling shares in Think & Learn which is Byju’s parent company. However, US-based lenders questioned the legitimacy of these funds suspecting they might be diverted from loans. On August 14, the Supreme Court stayed the settlement and directed the BCCI to deposit Rs 158 crores in a separate escrow account.
The Court also expressed concerns about the settlement’s validity and the NCLAT’s approval process. The insolvency proceedings against Byju’s resumed today and the company’s financial obligations will be reassessed by looking at the problems which include governance issues, missed revenue projections and investor conflicts.
Last week, Byju’s founder Byju Raveendran revealed in a virtual press conference that the company’s worth has effectively plummeted to zero. He said that the simultaneous resignation of key investors Prosus, Peak XV Partners and the Chan Zuckerberg Initiative from its board in 2023 significantly exacerbated the company’s struggles.
Also, read| Byju’s Worth Is Now Zero: What Went Wrong For India’s Ed-Tech Pioneer?
