Byju’s Pushed Into Insolvency Proceedings by India Cricket Body

(Bloomberg) — An Indian court allowed insolvency proceedings to begin against online tutor Byju’s, and installed an interim resolution professional to replace the firm’s once-storied founder.

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The country’s powerful cricket governing body initiated the process — Byju’s used to sponsor the national team — and the court order invited other financial creditors, employees of the firm and vendors to file claims. The “existence of a debt and a default in the payment of debt is clearly established,” the National Company Law Tribunal said Tuesday, adding it found no reason to deny the petition filed by the Board of Control for Cricket in India.

“This effectively means that founders and existing Board of Directors lose control of Byju’s,” said Satwinder Singh, managing partner at Aekom Legal. “The resolution professional will now be responsible for carrying out the operations of the company, and keep it as a going concern until the insolvency process is complete.”

Byju’s, founded by teacher Byju Raveendran, was valued at $22 billion at its peak but ran into financial and legal problems after its business dried up. The plea brought by the cricket board is one of several bankruptcy cases Byju’s is fighting in India and abroad.

“We wish to reach an amicable settlement with BCCI and we are confident that, despite this order, a settlement can be reached,” a spokesperson for Byju’s said in a statement. “In the meantime, our lawyers are reviewing the order and will take necessary steps to protect the company’s interests.”

–With assistance from Sankalp Phartiyal.