Byju’s settlement with BCCI stalemated by US lender

NCLT defers resolution as it is alleged that stolen money was being used for the deal

Bengaluru: The Board of Control for Cricket in India (BCCI) told the National Company Law Appellate Tribunal (NCLT) that it has reached a settlement with Byju's regarding the pending repayment of over Rs 158 crores on Wednesday. However, the settlement was deferred by NCLT, after the move was challenged by a US-based financial lender who told the Tribunal that the settlement was “tainted” as it was being repaid with “stolen money”.

Byju's refuted that the settlement money is not from the US, said a source who attended the hearing. On Thursday, on NCLT’s direction, Byju’s will give an undertaking on this.

The lender’s representatives, reportedly, furnished a court order from a Delaware court supporting their claim.

The Chennai Bench of NCLT, comprising of Justice Rakesh Kumar Jain (judicial member) and Jatindranath Swain (technical member), was informed on Wednesday that founder and suspended director Byju Raveendran’s brother Riju Raveendran (one of the largest shareholder of the beleaguered company) had pitched in the Rs 50 crore transferred to BCCI on Tuesday. The remaining amount is expected to be paid in two tranches on Friday and August 9.

The US-based financiers claimed that the repaid money is part of their $533 million. But the source DH spoke to, insisted that it is not true, because - one, the money repaid so far is a personal debt that is taken by Riju, and second, the US money cannot come to India.

The amount to BCCI had to be paid on priority so that the directors can take over the company, added the source. It was done by the interim resolution professional (IRP).

The settlement will render Byju’s assets unfrozen, enabling it to become operational.

Meanwhile, the NCLT has stalled the IRP of Think and Learn Private Limited, Byju’s parent company, from going forward with constituting the Committee of Creditors (CoC) pending Thursday’s hearing.

Earlier this month, the Bengaluru bench of NCLT began bankruptcy proceedings against Think and Learn Pvt Ltd after BCCI’s complaint of unpaid dues of sponsorship payments. The IRP was then appointed to take over the company from founder Byju Raveendran.

Think & Learn has been fighting the US lenders in courts in Delaware and New York over a $1.2 billion it owes them. In April 2024, the Delaware bankruptcy court observed, “Despite their best efforts to do so, the debtor (an SPV created for resolving the matter) has been unable to locate the missing funds. Riju Ravindran refuses to tell the debtor where the money is and claims that he does not know where it is, despite being a Director of the parent company that authorised the transfer.”

The court also noted, “After the transfer, debtor’s founder Byju Ravindran is quoted as saying: “the money is someplace the Lenders will never find it.” It is difficult to imagine a single combination of words to demonstrate actual fraudulent intent more clearly.”

In May, US Bankruptcy Judge John Dorsey reportedly said in a hearing in Delaware that Riju deceived the court and did not make a serious effort to find out what happened to the money.