In a plea before the Karnataka HC, CEO Byju Raveendran said that the insolvency proceedings will likely cause vendors, who “provide critical services” for the upkeep of the startup’s online platforms, to declare a default
Raveendran also said that he is willing to pay the pending dues to the BCCI in the next 90 days
This comes days after the NCLT admitted a plea by the BCCI to commence an insolvency resolution process against the edtech startup over INR 158.9 Cr in pending dues
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Byju Raveendran, the founder and CEO of troubled edtech juggernaut BYJU’S, has reportedly said that the insolvency proceedings initiated against the startup will likely “force” thousands of its employees to resign.
As per a 452-page filing before the Karnataka High Court (HC), accessed by Reuters, Raveendran said that the move will also result in a “total shutdown” of the edtech startup’s operations.
The petition, filed through his counsel MZM Legal, seeks to quash the insolvency proceedings. The plea is also said to detail the possible business impact of the insolvency process on the company.
The HC has listed the matter for hearing on Monday (July 22).
In the plea, Raveendran said that the proceedings will likely cause vendors, who “provide critical services” for the upkeep of the startup’s online platforms, to declare a default. This, he added, could lead to a “total shutdown of services” and bring the edtech’s operations to a “grinding halt”.
Claiming that the edtech’s employees “shall suffer … and may be forced to leave the organisation” if the insolvency process moves ahead, Raveendran claimed he is willing to pay the pending dues to the Board for Control of Cricket in India (BCCI) in the next 90 days.
The appeal before the HC comes days after the National Company Law Tribunal (NCLT) admitted a plea by the BCCI to commence a corporate insolvency resolution process (CIRP) against the edtech startup. BYJU’S owes INR 158.9 Cr to the cricket body over a jersey sponsorship deal involving the Indian cricket team.
The NCLT appointed Pankaj Srivastava as the interim resolution professional (IRP) and directed him to issue a public notice to invite claims from all creditors. The NCLT also asked the company’s US-based lenders to put forth their claims before the IRP.
What this means is that Srivastava has taken over the control of the edtech startup and Raveendran has been ousted from the company unless the founder wins an appeal in the case.
This comes at a time when BYJU’S is trying to douse fires on multiple fronts, including a looming debt crisis, a public spat with investors, a cash crunch, mounting losses, mass layoffs, and salary delays.
Earlier this week, Inc42 reported that the company has been locked out of its more than 100 BYJU’S Tuition Centre (BTC) across the country over unpaid rent and other utility bills. This has deepened the crisis at BYJU’S, which has already been struggling to pay the salaries of its employees.
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