The National Company Law Appellate Tribunal (NCLAT), Chennai on August 2 accepted the settlement agreement between Byju’s and the Board of Control for Cricket in India (BCCI) and set aside the order directing insolvency proceedings against Think and Learn Private Limited, Byju’s parent company.
National Company Law Tribunal (NCLT), Bengaluru had ordered insolvency proceedings against Think & Learn Private Limited on July 16 in a case filed by BCCI claiming a default of ₹158 crore.
Byju Raveendran, the suspended director, shareholder and promoter of the edtech company has moved an appeal before NCLAT.
Riju Raveendran, brother of Byju Raveendran and largest shareholder of Think & Learn offered to pay the dues of BCCI through his personal funds.
He said ₹50 crore has already been paid through RTGS. Another ₹25 crore will be paid on August 2 through RTGS and ₹83 crore to be paid on or before August 9 through RTGS.
The lenders opposed the settlement proposal questioning the source of funds alleging that it is tainted money and argued that settlement to the operational creditor (BCCI in this case) is a preferential transaction violating the provisions of the Insolvency and Bankruptcy Code.
In 2021, U.S. lenders represented by Glas Trust had disbursed $1.2 billion to Byju’s Alpha, a step-down subsidiary of Think and Learn and a missing $533 million of the amount has been subject matter of dispute between the parties before the Delaware Court.
In his undertaking to NCLAT, Riju Raveendran said his settlement proposal was not in violation of any order, including that of the Delware court and it has nothing to do with $533 million.
In view of the undertaking given and affidavit filed, the settlement is approved, the appeal succeeds and the impugned order is set aside, NCLAT Chennai Judicial Member Justice Rakesh Kumar Jain and Technical Member Jatindranath Swain, Member (Technical) said in the order pronounced on Friday.
However, they also clarified if there is a breach in the undertaking given, the insolvency order shall be revived.
NCLAT also noted the lenders have not brought any evidence that the money is from the amount disbursed to Byju’s Alpha or coming from the coffers of Think and Learn.
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