Source – outlookbusiness.com
Legal Maneuver Ahead of Supreme Court Challenge
Byju Raveendran has filed a caveat with the Supreme Court in anticipation of a potential challenge from Glas Trust Company LLC, a US-based creditor. This move follows a recent order by the National Company Law Appellate Tribunal (NCLAT) that reversed insolvency proceedings against Raveendran’s ed-tech firm. The caveat was submitted on August 3, just one day after the NCLAT restored the company’s board and dismissed the insolvency case.
Dispute Over Dues Settlement
The conflict centers on a Rs 158.9 crore settlement involving the Board of Control for Cricket in India (BCCI). Glas Trust has contested this settlement, alleging that the funds used by Raveendran’s brother, Riju Raveendran, were part of a “round-tripping” scheme. They argue that the payment, which was made to settle dues with BCCI, may not have been legitimate. In response, Byju Raveendran preemptively filed the caveat to ensure that the Supreme Court hears his side before making any decisions on the matter.
NCLAT’s Recent Decision
Last Friday, a two-member bench of the NCLAT approved the Rs 158.9 crore settlement and overturned the insolvency proceedings initiated by BCCI. The tribunal noted that the settlement occurred before the Committee of Creditors (CoC) was formed and confirmed that the source of funds was legitimate. The NCLAT found that the payments, made through proper banking channels by Riju Raveendran, were supported by an affidavit and undertakings, including a significant portion paid on July 31, 2024.
Background and Company Challenges
The NCLT’s Bengaluru bench had earlier ordered the initiation of Corporate Insolvency Resolution Proceedings (CIRP) against Byju on July 16, following BCCI’s claim for the unpaid amount. Byju Raveendran’s challenge to this order led to the recent NCLAT decision. Byju’s, once valued at USD 22 billion, has faced significant issues post-pandemic, including missed financial deadlines and revenue shortfalls. Recent troubles were compounded by a dramatic reduction in its valuation by BlackRock to USD 1 billion.
The company’s difficulties were further exacerbated in February when key investors, including Prosus and Peak XV, voted to remove Raveendran as CEO amid allegations of mismanagement, which he has denied.
