Byju Raveendran, the eponymous founder of education technology startup Byju’s, is back in control of the company.
The insolvency resolution process against Byju’s parent company Think and Learn has been halted as the National Company Law Appellate Tribunal (NCLAT) on Friday accepted the settlement reached between Byju Raveendran and the Board of Control for Cricket in India (BCCI).
With this, company promoters, including Byju Raveendran, are in control of the firm.
However, this is with the condition that the undertaking given by Byju Raveendran and Riju Raveendran is not breached. Any failure to make payments on the specific dates mentioned in the undertaking would automatically lead to a revival of the insolvency proceedings against Byju’s.
“In view of the undertaking given and affidavit filed, the settlement is approved, the appeal succeeds, and the impugned order is set aside. However, with the caveat that in case there is a breach in the undertaking given, the insolvency order shall be revived,” a coram of judicial member Rakesh Kumar Jain and technical member Jatindranath Swain ruled.
The appellate tribunal said that the settlement is being reached before the Committee of Creditors (CoC) could be formed, considering that the source of the money (for settlement) is not in dispute, it did not have any reason to keep the company in the insolvency process.
The NCLAT noted that “money being offered by the largest shareholder and former promoter (Riju Raveendran) has nothing to do with the US lenders, which gives the court power to rule.”
The court also said that Tushar Mehta, appearing for BCCI, had said they will not accept “tainted” money and that the money is income generated in India. The money is coming from a proper channel, noted the court.
Resilience
Welcoming the order, Byju Raveendran, founder and chief executive officer of Byju’s, said, “Today’s NCLAT order is not just a legal victory, but a testament to the heroic efforts made by our Byju’s family in the last two years. Our founding team members have poured their hearts and souls, not to mention their entire savings, into this dream, often at great personal cost,” said Raveendran.
He said every Byjuite (employee) has demonstrated extraordinary resilience, working tirelessly through unprecedented challenges.
“Their collective sacrifice humbles me, and I am deeply grateful to each one of them. Our trials and tribulations have only strengthened our resolve and sharpened our focus. Today, we stand not just stronger, but more united than ever,” said Byju Raveendran. “I have always believed that truth eventually prevails and hard work always wins. We have nurtured Byju’s for two decades, and we are committed to its mission of imparting high-quality education to students everywhere. You can never defeat a team that never gives up,” he said.
The company said that Byju’s and its founders, NCLAT agreed to the settlement terms concluded between one of the founders of Byju’s with BCCI. This brought an immediate end to the insolvency proceedings initiated by the July 16 order of the National Company Law Tribunal (NCLT).
The company said the presiding judge invoked Rule 11 of the NCLAT Rules, 2016 to return control of Think & Learn Private Limited, the holding company of Byju’s, back to its promoters. The company said that NCLAT rejected allegations made by certain US-based lenders that the source of the money being used to settle the BCCI dues was not transparent or trustworthy.
Byju’s said that it became clear during the proceedings that the promoters of Byju’s have gone to great lengths and made immense personal sacrifices to keep their company running. They have reinvested their entire savings and even borrowed heavily to help Byju’s navigate through financial challenges. The company said the details of the money generated through the secondary sale of shares and its consequent reinvestment in the company were transparently shared with the NCLAT. “The validation and vindication of their sacrifices in this NCLAT order serve as a strong reassurance to all Byju’s employees and students,” said the company.
The company said all the teams at Byju’s continue to work hard to strengthen stakeholder confidence and reinforce their commitment to serve millions of students.
Clean Money
Riju Raveendran, a Byju’s board member and younger brother of the edtech founder Byju Raveendran, had told the NCLAT on Thursday that the money paid to the BCCI is “clean”.
Representing Riju, senior advocate Puneet Bali said the money was paid from the sale of his Think & Learn Pvt. Ltd (TLPL) shares between 2015 and 2022.
TLPL is the parent company of Byju’s.
Bali said Riju, by the sale of shares during this period, accumulated almost Rs 3,600 crore.
“Of this, Rs 1,040 crore was paid as income tax. The remaining Rs 2,600 crore was infused in TLBL to ensure it continues as a going concern. The amount with Riju was used to pay the first tranche of the settlement amount of Rs 50 crore to BCCI on June 30, 2024. From the liquidation of Riju’s personal assets in India, he used the funds to pay the balance amount,” Bali said.
The appellate tribunal on Friday noted the typographical error that the first tranche of settlement amount of Rs 50 crore was paid to BCCI on July 31, 2024 and not June 30, 2024.
The court, in a lighter vein, told the lenders, “I know you will use this (error) to go to the Supreme Court.”
As per the undertaking, Riju Raveendran has made a payment of Rs 50 crore on July 31 against the outstanding dues owed by Byju’s to BCCI. Another Rs 25 crore will be submitted on Friday, and the rest of Rs 83 crore on August 9 through RTGS.
The bankruptcy court in India had recently admitted an insolvency petition against Byju’s by the BCCI over dues amounting to Rs 158 crore over cricket sponsorship deals.
The US lenders, represented by senior advocate Mukul Rohatgi, had objected to the affidavit saying the “math did not add up.” The first tranche of the settlement amount of Rs 50 crore to BCCI was on July 31 (earlier said as June 30), 2024.
“We are left with nothing. These two Raveendrans have voluntarily gone for insolvency in the US. There is nothing on record to show that they have any money. It can’t be that there (US) you are a defaulter and here you come to India and say I’ll pay,” he said.
He also asserted that Byju and Riju were both fugitives as they do not live in India anymore. “He is a fugitive, there is an ED investigation and look-out circular against him. He will not pay salaries, PFs, and rents but he wants the stamp of approval from a tribunal for settlement.”
Rohatgi said the Raveendran brothers are trying to delay the company’s insolvency resolution process for six months to deteriorate the value of the company.
A day earlier, a suspended director of the troubled edtech firm Byju’s was told to pay $10,000 a day until he helps to find $533 million that his company is accused of hiding from US lenders, a US judge said.
Riju Raveendran, brother of Byju’s founder, has been at the centre of a nearly two-year-old fight over the missing cash. His counsel told the court that the money paid to BCCI was not part of the $533 million as alleged by the lenders.
