Supreme Court Revives Insolvency Proceedings Against Byju’s, Questions Preferential Treatment of BCCI

The Supreme Court's ruling has reignited concerns about Byju’s financial health, as the company grapples with over $1.2 billion in debt.

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New Delhi: In a major setback for Byju’s, the Supreme Court has overturned the settlement between the ed-tech company and the Board of Control for Cricket in India (BCCI), effectively reopening insolvency proceedings. The court directed that the ₹158 crore paid by Byju’s to the BCCI as part of the settlement be held in an escrow account until further review. The decision allows Byju’s creditors to approach the Committee of Creditors (CoC) for remedies under the Insolvency and Bankruptcy Code (IBC).

The case escalated when Glas Trust, a US-based creditor, raised objections, alleging that Byju’s preferentially settled with BCCI while ignoring other creditors. The Supreme Court supported Glas Trust’s claims, with Chief Justice DY Chandrachud criticizing the ed-tech company for settling a single debt while carrying ₹15,000 crore of liabilities. “Can one creditor (BCCI) walk away while the company is in such massive debt?” Chandrachud questioned, highlighting the need for a more equitable approach to creditor payments.

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Byju’s legal team, led by Abhishek Manu Singhvi, defended the settlement, stating that the funds came from personal resources of Riju Raveendran, co-founder and brother of Byju Raveendran. However, Glas Trust argued that the money used in the settlement was “tainted” and could involve round-tripping.

The Supreme Court’s ruling has reignited concerns about Byju’s financial health, as the company grapples with over $1.2 billion in debt. This decision ensures that the insolvency process continues under strict oversight, leaving it up to the CoC to address all creditors’ claims, including those of BCCI.

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