Edtech giant BYJU’S saga of troubles continues unabated. The National Company Law Tribunal (NCLT) has now issued a notice to the decacorn in connection with a petition filed by the Board of Control for Cricket in India (BCCI).
In an order issued on November 28, the Bengaluru bench of the insolvency tribunal admitted BCCI’s petition that pertains to a dispute over the sponsorship rights of the Indian cricket team’s jerseys.
The tribunal, comprising Member (Technical) K Biswal and Member (Technical) Manoj Kumar Dubey, directed the edtech major to furnish a reply in connection with the case within two weeks (December 12) of the issuance of the order. It also allowed the cricket board to file a rejoinder, if any, in the matter by December 19.
“Issue notice to the respondent (BYJU’S)…. Two weeks is granted to the respondent to file reply and one week thereafter is granted to the Applicant to file rejoinder, if any, after duly serving the copy on the other side,” noted the NCLT bench.
The case has now been listed next for hearing on December 22.
At the heart of the matter is the plea filed by BCCI that claims dues to the tune of INR 158 Cr from BYJU’S as an operational creditor under section 9 of the Insolvency & Bankruptcy Code 2016. The order also noted that BCCI issued a general notice to BYJU’S through an e-mail on January 6, 2023 with a default amount of INR 158 Cr, excluding TDS.
The matter pertains to 2019, when the edtech major took over the mantle of the sponsorship of the Indian cricket team from OPPO till March 2022. BYJU’S took over the rights in the middle of the smartphone brand’s tenure and the former stayed on for two-and-a-half years.
The edtech major eventually sought an extension of the sponsorship for an additional year till 2023-end, reportedly for a cumulative sum of $55 Mn.
The deal fell apart as BYJU’S unceremoniously exited its jersey sponsorship deal with the BCCI in December 2022 as financial and regulatory troubles began to pile up. Last month, it emerged that BCCI had filed a case against the company. In response, the company said that it was in discussions with the cricket board and was looking to settle the matter soon
As the funding winter began to unravel, the startup hit the headlines for all the wrong reasons. As capital became scarce, the company began a cost cutting exercise, which saw jobs of more than 5,500 employees being axed beginning 2022 with another 4,000 on the way.
Meanwhile, losses continued to balloon even as a debt crisis, involving $1.2 Bn Term Loan B (TLB), loomed over the company. BYJU’S also publicly sparred with its lenders even as acquisitions pummeled its financial health.
The company has also faced a regulatory crackdown as the Enforcement Directorate (ED) has accused BYJU’S of flouting FEMA norms. The decacorn has also been under the spotlight for delayed financials which saw the exodus of auditor Deloitte and three key board members earlier this year.
While the company released its partial financial results for FY22 just a few months back, there seems to be no clarity on FY23 numbers. It is now preparing for its upcoming annual general meeting (AGM) slated for December 20, where it will seek shareholder approval for audited FY22 financial statements.
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