Byju’s CEO Byju Raveendran tells court it will face total shutdown if insolvency proceeds: Report 

Byju’s crisis: Byju’s Founder and CEO Byju Raveendran has told the court that insolvency proceedings against the ed-tech major would force thousands of its employees to quit and result in a total shutdown of its services, Reuters reported on Friday. 

Earlier this week, the National Company Law Tribunal’s Bengaluru bench, on Tuesday, admitted BCCI’s plea against Byju’s. This was done after BCCI had sought initiation of the insolvency proceedings against Byju’s over alleged unpaid dues of Rs 158 crore. Byju’s had a sponsorship contract with BCCI for the Indian cricket team.  

Byju’s has been facing challenges in the recent past, such as layoffs, a decline in its market value, and conflicts with stakeholders over allegations of lapses in corporate governance by its CEO Byju Raveendran. Despite these difficulties, Byju’s has refuted any allegations of misconduct. 

Raveendran has told the court that the insolvency process will likely cause vendors who provide critical services to Byju’s for the upkeep of online platforms to declare a default, “leading to a total shutdown of services” and bringing the operation to “a grinding halt.” 

As per sources, Byju’s on Thursday moved NCLAT contesting the recent order of NCLT’s Bengaluru bench that had admitted the BCCI’s plea to start insolvency proceedings against the parent company Think and Learn, after the edtech firm failed to pay Rs 158.9 crore dues.

NCLT has appointed Pankaj Srivastava as the interim resolution professional.

Earlier this week, Byju’s had said it is hopeful of reaching “an amicable settlement” with the Board of Control for Cricket in India (BCCI).

A Byju’s spokesperson had said: “As we have always maintained, we wish to reach an amicable settlement with BCCI and we are confident that, despite this order, a settlement can be reached. In the meantime, our lawyers are reviewing the order and will take necessary steps to protect the company’s interests.

Byju’s was previously valued at $22 billion. However, the resurgence of in-person schooling following the relaxation of pandemic restrictions precipitated a downturn for the company. Recently, investment firm BlackRock drastically reduced Byju’s valuation to $1 billion.

The company’s challenges commenced when it failed to meet financial reporting deadlines two years ago and fell short of revenue expectations by over 50%. Subsequently, in February, a coalition of investors within Byju’s parent company Think & Lean, which includes Prosus and Peak XV, made the decision to oust Raveendran from his position as CEO through an extraordinary general meeting (EGM). The grounds for this decision were claims of “mismanagement and failures”. Raveendran, however, refuted these allegations and contested the legitimacy of the vote.