BYJU’S Suspended Resolution Professional Alleges Pressure To Rope In EY

With BYJU’S stuck in bankruptcy limbo, its suspended resolution professional Pankaj Srivastava has made damning allegations against Khaitan & Co, accusing the law firm of strong-arming him to appoint EY as process advisor for investigation into the edtech firm.

In a confidential filing to the Insolvency and Bankruptcy Board of India (IBBI), Srivastava alleged that officials of Khaitan & Co insisted that he engage EY as the process advisor for the corporate insolvency resolution process (CIRP) of Think & Learn Pvt Ltd, the parent of BYJU’S, as per a report by Business Standard.

“They further insisted that if I did not cooperate for appointing EY as the IPE, they would malign my image as insolvency professional,” the former insolvency officer in BYJU’S bankruptcy case said.

Khaitan & Co is representing GLAS Trust, a consortium of US-based lenders who gave BYJU’S a $1.2 Bn term loan B in 2021, in their legal battle against BYJU’S and its debt default.

Srivastava further alleged that GLAS Trust had no legal backing in the matter at the time to instruct an insolvency resolution professional. The US-based group is said to have supported  the EY team through its counsels Khaitan & Co and Eliis, and sent several unwarranted directions to Srivastava.

Khaitan & Co officials allegedly threatened Srivastava with “personal consequences” had he appointed anyone other than EY as the process advisor in the case against BYJU’S as it would have been “counterproductive to the interests of GLAS Trust.”

However, in a statement to Inc42, Khaitan & Co refuted these allegations, calling them “untrue and baseless”. It refrained from making any further comments, given the matter is currently sub-judice.

Srivastava also allegedly submitted that he did not mislead authorities or fail his statutory duties. In January, the National Company Law Tribunal (NCLT) initiated disciplinary proceedings against Srivastava while setting aside his decision to oust GLAS Trust and Aditya Birla Finance from the CoC. 

The latest development comes against the backdrop of BYJU’S founder and CEO Byju Raveendran’s allegations that he and several employees of the company received a document with “conclusive evidence of criminal collusion” between EY India, the lenders and Srivastava. 

It is pertinent to mention that BYJU’S has faced numerous setbacks in the past few years, leading to erosion in investor confidence, thousands of job cuts at the edtech company and a collapse in its valuation from $22 Bn to zero.

The company is undergoing bankruptcy proceedings in the country after the Board of Control for Cricket in India (BCCI) took it to court over unpaid dues worth $19 Mn related to sponsorship rights.

Earlier this month, the NCLT’s Bengaluru bench appointed Shailendra Ajmera as the new insolvency resolution professional (IRP) of cash-strapped BYJU’S. The tribunal has also directed the BCCI to submit its application for settling its insolvency dispute with BYJU’S newly-constituted CoC.

The developments come on the heels of a US insolvency court ruling in favour of the lenders of BYJU’S in connection with a case involving alleged fraudulent transfer of $533 Mn by the troubled edtech startup. 

Last year, a Nebraska-based businessman accused BYJU’S founder of trying to regain control of Epic! using hidden loan money that he allegedly hid from investors.

Editor’s Note: This article has been updated with a statement from Khaitan & Co.