Insolvency appellate tribunal NCLAT on Wednesday deferred its decision on the settlement between Byju’s and cricket board BCCI after its US-based creditor alleged ’round-tripping’ of the money by the edtech firm’s founder. The Chennai bench of NCLAT has asked the now-suspended promoters of Byju’s to furnish an undertaking by Thursday, that over Rs 158 crore to be paid by Riju Raveendran (brother of Byju’s founder Byju Raveendran) is not tainted and not against the order passed by a US-based court.
Meanwhile, the National Company Law Appellate Tribunal has also directed the interim resolution professional (IRP) of Think and Learn Pvt Ltd, which owns Byju’s, not to constitute Committee of Creditors (CoC) till August 1, the next date of hearing.
During the proceedings, lawyers appearing for Byju’s handed over a draft memorandum of settlement between Byju’s and the Board of Control for Cricket in India (BCCI).
According to the terms and conditions, the money will be paid in two instalments of Rs 50 crore each and the rest in the third instalment. One tranche has already been paid on Tuesday.
The payment is being done by Riju, who is also one of the largest shareholders in the company.
However, Senior advocate Mukul Rohatgi, who was appearing as an intervener in this matter for US-based creditor Gas Trust LLC, which is claiming default of Rs 8,000 crore loans, alleged that this money is from ’round tripping’.
He asked NCLAT not to accept the settlement calling it “tainted money” which is stolen from his client. He also questioned how a company, which is not even able to pay salaries to its employees and whose coaching centres are getting closed, has now arranged the money.
“The source is tainted. How can the court allow settlement?,” said Rohatgi, and asked “has it (money) come from an official account” of Byju’s? Rohatgi further alleged that both Byju and Riju conspired and stole USD 500 million belonging to the US-based creditor.
“It is our money which has been withdrawn by these fellows,” said Rohatgi while reading a judgment delivered by a Delaware-based court of the US, in a bankruptcy case against Byju’s US entity Byju’s Alpha.
In the May 2024 judgement, the US court had said Riju not only failed to make a serious effort to find out what happened to the cash but deceived the court also.
Rohatgi further said it has also filed a section 7 plea for initiation of insolvency proceedings against Think & Learn, which is currently under abeyance. He hinted that if this matter is settled then he would pursue the insolvency plea filed by the US-based creditor.
Arun Kathpalia, appearing for the promoter, said the money is paid by Riju and there is no embargo on him on making this payment.
Solicitor General of India Tushar Mehta — appearing for the cricket body said it does not matter whether the money is from Riju or Byju’s.
If the money is transparent, BCCI has a right on it, he argued.
Over the allegation of round-tripping, senior advocate Dhyan Chinnappa, appearing for the former promoters said the overseas fund is to fund overseas operations.
“It cannot be brought to India,” he said adding “Riju has raised this money to save the company.” NCLAT was hearing a petition filed by Byju’s, challenging the initiation of insolvency proceedings against Think & Learn.
On July 16, the Bengaluru bench of National Company Law Tribunal (NCLT) directed initiation of Corporate Insolvency Resolution Proceedings (CIRP) against Byju’s, admitting the plea filed by BCCI.
BCCI had approached NCLT under the Insolvency and Bankruptcy Code (IBC) over a default of Rs 158.9 crore by Think & Learn — once India’s most valuable startup worth USD 22 billion.
NCLT has suspended the board of Think & Learn as per the provisions of the IBC and appointed an interim resolution professional (IRP) to take care of the debt-ridden firm.
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