NCLT pushes decision on Byju’s settlement with BCCI yet again

Bengaluru: The National Company Law Appellate Tribunal (NCLAT) deferred taking a call on Byju’s settlement with the Board of Control for Cricket in India (BCCI) for a second time on Thursday, pushing it to Friday. The NCLAT Chennai Bench also deferred the formation of a Committee of Creditors (CoC) by the interim resolution professional (IRP). 

As reported, US-based lenders challenged the settlement, saying the money being used is part of their “missing” $533 million. On Wednesday, NCLAT sought an undertaking that no part of that money is being used. 

Riju Raveendran, brother of founder Byju Raveendran, is paying the full settlement in tranches. Complying with the bench’s order, an affidavit was furnished on Thursday, stating that the source of his money has nothing to do with the $533 million.

The affidavit, filed on behalf of Riju (who is in London) also said that he has not violated any court order including the Delaware Bankruptcy Court passed in March 2024. 

Byju’s lawyers declared, under the credit agreement, the money disbursed could not be brought to India. They refused a third party intervention at this stage. 

The undertaking further revealed the source of the settlement amount is being funded by money raised by Riju, selling his shares in Think and Learn Private Limited (Byju’s parent company) between May 2015 and January 2022, which yielded him Rs 3600 crore. Of this, Rs 1050 crore was paid as income tax. The remaining Rs 2600 crore was infused back into TLPL due to its operational needs and to ensure that TLPL continues to carry on business as a growing concern, including paying salaries to its 27,000 employees. Liquidation of Riju’s personal assets in India will be used to pay the balance amount of the settlement. 

On Thursday, the lenders again drew the bench’s attention to Byju’s failure to locate the “missing” $533 million. They also called him a fugitive, who had not paid salaries. They highlighted that none of the centres of the edtech company was functional and its financial data was unavailable, while its valuation has fallen from $22 billion to zero.

They added that while Byju’s is in a deep financial crisis, its directors are sitting outside the jurisdiction of the court, and that the opposition is in the interest of all stakeholders and financiers, not just one. 

Byju’s representatives, however, retorted that Riju said he has received no money except for foreign remittances in two sales in January and November 2022. Therefore, as far as the Rs 158 crore is concerned, is not relatable to those US proceedings at all and there has been no violation. 

Meanwhile, according to a Bloomberg report, a US Bankruptcy judge has imposed a fine of Rs 10,000 a day on Riju Ravindran until the “missing” $533 million is found.