The US lenders requested the tribunal not to accept the settlement, calling it a “tainted settlement”. They also alleged that the settlement amount is from “stolen money”
As a result, NCLAT has asked the founder Byju Raveendran to ensure that the source of the money was not tainted and that no court orders were violated in obtaining the capital
The development follows the report of BYJU’S reportedly transferring INR 50 Cr to the BCCI as part of the first tranche of payments to settle the ongoing insolvency dispute
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The National Company Law Appellate Tribunal (NCLAT) has reportedly postponed its decision on approving the INR 158 Cr settlement between BYJU’S and the Board of Control for Cricket in India (BCCI) after the embattled edtech startup’s US-based lenders raised allegations, questioning the source of the capital.
As per Moneycontrol’s report, the lenders requested the tribunal not to accept the settlement, calling it a “tainted settlement”. They also alleged that the settlement amount is from “stolen money”.
As a result, NCLAT has asked the founder Byju Raveendran to ensure that the source of the money was not tainted and that no court orders were violated in obtaining the capital.
The development follows the report of BYJU’S reportedly transferring INR 50 Cr to the BCCI as part of the first tranche of payments to settle the ongoing insolvency dispute.
This 50 Cr settlement was reportedly made via Byju Raveendran’s brother Riju Raveendran and the remaining INR 83 Cr lot was scheduled to be paid by August 8, the reports added.
Citing the findings of a US court, senior advocate Mukul Rohatgi who represents the US lenders added that both Byju and Riju conspired to siphon off over INR 500 Cr.
As per Bar and Bench’s report, Rohatgi said that this settlement money belonged to the US lenders. “And now the debtor is offering to pay off the dues of 158 crores. It is our money that has been withdrawn by these fellows.”
Meanwhile, senior advocate Harish Salve who represents the BCCI also assured that the cricket control authority would never accept any tainted money.
Alongside this, Solicitor General of India Tushar Mehta, who is also representing BCCI, pointed out that the creditor’s concerns were based on assumptions.
“They (creditors) have argued before me that don’t believe Riju Raveendran. Then they showed me the US order of prohibitory injunction on the use of that 533 million,” NCLAT was quoted as saying in the report.
Seeking relief on the development, Byju Raveendran’s counsel replied that some assurance should be given to ensure that the insolvency process against BYJU’S does not come in the way of the proposed settlement.
It is pertinent to note that earlier this month NCLT admitted the BCCI’s plea to initiate the corporate insolvency resolution process against BYJU’S for not paying the dues to the tune of INR 158.9 Cr to the cricket body for a sponsorship deal.
Following this, Raveendran took the matter to the Karnataka High Court to suspend the NCLT order. However, the HC headed by a single bench of Justice S R Krishna Kumar disposed of Raveendran’s plea.
This comes at the heart of multiple other entities, including BYJU’S US-based Term Loan B lenders, also filing insolvency petitions against the beleaguered company in the past.
BYJU’S, once the poster child of the Indian startup ecosystem, is battling multiple issues, including mass layoffs, a severe cash crunch, delay in filing financial statements, a slew of legal cases and mounting regulatory scrutiny. Making matters worse is a public spat with investors even as losses continue to mount for the company.
BYJU’S net loss surged 81% year-on-year YoY to INR 8,245.2 Cr in FY22.
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