New Delhi: Byju’s, once valued at $22 billion, is now facing insolvency proceedings. An Indian tribunal court started these proceedings on Tuesday after the Board of Control for Cricket in India (BCCI) filed a petition. The court’s decision has led to the appointment of an interim resolution professional to manage the company, removing its founder from his role. At its peak, Byju’s was India’s most valuable startup.
The National Company Law Tribunal’s ruling came after BCCI’s attempt to recover nearly $19 million from Byju’s, which is based in Bengaluru and had previously sponsored the Indian cricket team. The tribunal has invited creditors, employees, and vendors to file claims against Byju’s, stating that the existence of a debt and a default in its payment are clearly established.
Byju’s can appeal the decision and has expressed a desire to reach a friendly settlement with BCCI. A spokesperson for Byju’s mentioned that their legal team is reviewing the order and will take necessary steps to protect the company’s interests.
This court order is the latest in a series of crises that have troubled Byju’s over the past two years. The company’s problems began when it missed financial reporting deadlines and failed to meet revenue projections by over 50%. Governance issues have also been highlighted by top investors, including Prosus and Peak XV, who have accused the company of mismanagement. This group of investors, which includes Sofina and the Chan Zuckerberg Initiative, is legally challenging Byju’s and seeking the removal of its founder, Byju Raveendran. Last year, board members and the auditor resigned in protest.
The conflict worsened earlier this year after Byju’s lowered its valuation to just $25 million to raise capital through a rights issue.
