BYJU’S Insolvency: EY Quits As Advisor To IRP Pankaj Srivastava

In further troubles for Pankaj Srivastava, the insolvency resolution professional (IRP) of BYJU’S, EY (Ernst and Young) Restructuring has reportedly resigned from its role of advisor to the IRP. 

The Times Of India reported the development citing the minutes of the first meeting of the Committee of Creditors (CoC). 

A mail sent to EY and representatives of the IRP seeking information on the development didn’t elicit any response till the time of publishing this story. BYJU’S declined to comment on the matter. 

This comes at a time when Srivastava has been dragged to courts by multiple creditors of BYJU’S. 

Glas Trust, a consortium of BYJU’S US-based lenders, moved the Supreme Court earlier this week against Srivastava’s decision to remove it from the CoC. The consortium  accused him of making an “irrational” decision and are seeking his removal from the proceedings. 

Srivastava ousted Glas Trust from the CoC during its first meeting. The decision was made after concluding that Glas Trust did not represent the minimum 51% of lenders in the consortium, which provided the $1.2 Bn term loan B (TLB) to BYJU’S. 

Earlier in a statement, Glas Trust labelled Srivastava’s move as unprecedented and entirely illegitimate and said it marked the first instance in the history of the Insolvency and Bankruptcy Code of India where financial creditors were “unlawfully stripped of this magnitude amounting to more than $1.35 Bn without any legitimate reason”.

Besides, Aditya Birla Group also moved the National Company Law Tribunal (NCLT) against Srivastava, alleging that he committed fraud by wrongfully labelling it as an ‘operational creditor’ instead of a ‘financial creditor’.

It is also pertinent to note that BYJU’S auditor BDO (MSKA & Associates) resigned earlier this month citing concerns over “financial” and “governance” issues.

In its resignation letter, BDO highlighted several troubling issues, including delays in financial reporting, lack of support from the management and concerns over recovering outstanding dues from a Dubai-based entity.

BYJU’S, once a posterboy of the Indian startup ecosystem, has been in the news for all the wrong reasons over the last year or so. From a severe cash crunch, delay in filing financial statements to investors quitting its board and mass layoffs, the company has been plagued by a host of problems. This has culminated in the company undergoing insolvency proceedings.