Following the acceptance of an insolvency petition against it by India's cricket board, months after important investors attempted to force Byju Raveendran out of the company he founded, he has lost operational control of his edtech startup.
A bankruptcy specialist was appointed by the National Company Law Tribunal on Tuesday to manage Byju's daily operations while the court considers an insolvency petition that the Board of Control for Cricket in India filed against the online tutor.
Missing BCCI's payment
The Indian cricket team's previous sponsor, BCCI, was hauled before the bankruptcy court for allegedly missing payments totaling Rs 158 crore. The order on Tuesday was the first in this case.
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"There is no reason to deny the petition... since the existence of a debt and a default in the payment of debt are clearly established," the tribunal's Bengaluru bench declared.
Appointment from NCLT bench
Pankaj Srivastava was named by the NCLT bench, which is composed of Justices K. Biswal and Manoj Kumar Dubey, as the temporary insolvency resolution specialist who will manage Byju's operations until the case is resolved.
Byju's feuds with Investors
Prosus NV, General Atlantic, Sofina, and Peak XV Partners, along with Tiger Global and Owl Ventures, were the group of four investors in Byju that petitioned the NCLT in February to block the edtech company's controversial USD 200 million rights issue.
In addition, Byju's foreign investors have sued the business in a Delaware court regarding a USD 1.2 billion term loan (TLB). In an effort to recoup the loan, they have also submitted an insolvency petition to the Bengaluru bench of the NCLT.
All legal cases against Byju's will enter a moratorium period under the insolvency process, which will halt the proceedings. However, that would also make the edtech company's attempts to raise $200 million through the rights issue ineffective, making it more difficult for it to pay its debts, including those owed to BCCI.
