BYJU’S Insolvency: NCLT Orders Removal Of Resolution Professional

BYJU’S Insolvency: NCLT Orders Removal Of Resolution Professional

SUMMARY

The NCLT directed the IBBI to take disciplinary action against Srivastava, saying his conduct was not fit and proper

The NCLT also ordered the dissolution of the committee of creditors (CoC) constituted to oversee the bankruptcy proceedings of BYJU’S

The Tribunal also set aside Srivastava’s earlier decision to remove Glas Trust and Aditya Birla Finance from the CoC

In another twist in the ongoing insolvency proceedings of edtech major BYJU’S, the Bengaluru bench of the National Company Law Tribunal (NCLT) has ordered the removal of its resolution professional (RP) Pankaj Srivastava.

The Tribunal directed the Insolvency and Bankruptcy Board of India (IBBI) to take disciplinary action against Srivastava, saying his conduct was not fit and proper as expected from an officer of the tribunal, Bar and Bench reported.

“The conduct of the IRP in the present case has been filed with the intent to mislead the tribunal …The above conduct on part of IRP needs to be dealt by way of disciplinary proceeding by the IBBI. Hence, the IBBI may conduct the necessary investigation in this matter,” it ordered.

The NCLT also ordered the dissolution of the committee of creditors (CoC) formed to oversee the bankruptcy proceedings against the Byju Raveendran-led company.

The NCLT was hearing a plea filed by BYJU’S lenders US-based Glas Trust and Aditya Birla Finance, who alleged fraud in creditor classification.

In its order dated January 29, a bench of justices K Biswal and Ravichandran Ramaswamy called for the constitution of a new CoC, which will comprise Glas Trust and Aditya Birla Finance as well. The new CoC will decide on the appointment of a new resolution professional.

This comes on the heels of reports saying that a US court ordered the edtech giant to repay the $1.2 Bn loan to Glas Trust, which is a consortium of US-based lenders.

It must be noted that the NCLT is yet to rule on an application filed by the Board of Control for Cricket in India (BCCI) to settle its dispute with BYJU’S.

In October last year, the Supreme Court agreed to hear an appeal filed by Glas Trust against the National Company Law Appellate Tribunal (NCLAT) order that halted bankruptcy proceedings against Think & Learn, the parent company of BYJU’S.

Consequently, the apex court also reversed NCLAT’s previous order allowing a settlement dispute between BYJU’S and the BCCI.

BYJU’S is not only plagued by financial woes in India but also faces legal disputes in the US. Last year, Nebraska-based businessman William R Hailer alleged in court that Raveendran tried to regain control of its US subsidiary Epic! using loan money that he allegedly hid from investors.

Earlier this month, its coaching arm Aakash Educational Services sought the NCLT’s nod to amend its Articles of Association, contending that the firm urgently needs to secure funding for its survival and avert a financial crisis.

 

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