Illustration shows photograph of Byju's owner Byju Raveendran on his company's web page.
Credit: Reuters File Photo
New Delhi/Bengaluru: The Supreme Court, on Wednesday, stayed an order by the National Company Law Appellate Tribunal (NCLAT) which set aside the insolvency proceedings against beleaguered edtech major Byju's and had approved its Rs 158.9 crore dues settlement with the Board of Control for Cricket in India (BCCI).
This comes as a positive for the US-based creditors who had contended that the dues cleared with BCCI had been from the money owed to them.
Acting on a plea by US-based creditor Glas Trust Company LLC against the NCLAT verdict, a bench of Chief Justice DY Chandrachud and Justices JB Pardiwala and Manoj Misra directed the BCCI to keep the money received by it from Byju's in an escrow account, until further directions. This is expected to come on August 23, which is the date for the next hearing.
During the hearing, Solicitor General Tushar Mehta, on behalf of BCCI, opposed the stay order, seeking an opportunity of hearing. Senior advocate AM Singhvi for Byju's also contested the stay.
Senior advocate Shyam Divan, appearing for the creditor, however, contended the settlement was against the statutory provisions.
The Supreme Court also issued notices to Byju's on the plea, questioning the validity of the NCLAT order dated August 2.
"While NCLAT order on insolvency of Byju’s gets revived, the Supreme Court's decision indicates a significant level of judicial scrutiny regarding the company's financial dealings,” Mukesh Chand, Senior Counsel at Economic Laws Practice, told DH.
Chand said that the hearing on August 23 will likely focus on whether the NCLAT's decision to close the insolvency proceedings based on the BCCI settlement was appropriate given the broader financial context of Byju's.
“The Supreme Court might ask Byju's to provide a detailed account of how it plans to address the claims of other creditors and stakeholders," he said.
Glas, a trust for the creditors who are allegedly owed $533 million, had challenged the NCLAT order claiming that the settlement money being was stolen from the “missing” $533 million of the $1.2 billion that they had lent to Byju’s Alpha Inc (Byju’s offshore SPV), of which Riju Raveendran (brother of founder Byju Raveendran) was then the sole director.
Riju paid the full settlement amount to BCCI and presented an affidavit to the NCLAT showing the source of his money was personal and not related to the US-based lenders – it was on the basis of this that the settlement was allowed by the NCLAT.
The dispute between the BCCI and Byju's is related to the sponsorship contract for providing jerseys to the Indian Cricket Team.