National Company Law Appellate Tribunal (NCLAT) Chennai Judicial Member Justice Sharad Kumar Sharma on July 29 recused himself from hearing an appeal by Byju Raveendran against the insolvency proceedings ordered against Think & Learn Private Limited, which runs Byju’s, citing that he has appeared for Board of Control for Cricket in India (BCCI) as senior counsel in number of cases.

He directed for the matter to be placed before NCLAT chairperson for nomination of appropriate Bench for hearing the case.

Also read: Byju’s woes: A timeline of the Indian edutech giant’s troubles at home and abroad

The National Company Law Tribunal (NCLT), Bengaluru, had ordered insolvency proceedings against Think & Learn Private Limited. The development came after the Board of Control for Cricket in India (BCCI) filed a petition claiming a default of ₹159 crore.

The NCLT had appointed Pankaj Srivastava as an interim resolution professional, who will oversee the management of Byju’s and power of board of directors was suspended for now.

Byju Raveendran, suspended director, promoter, & shareholder of Think & Learn Private Limited had moved NCLAT against the insolvency proceedings order. At the hearing on July 29, Justice Sharad Kumar Sharma said he is not proposing to take up the matter, as he has been appearing as senior counsel for BCCI. “So, I can’t hear the matter,” he said.

“I will not venture into this. I have been regular counsel for the BCCI in a number of cases”, Justice Sharad Kumar Sharma said and directed the case to be placed before NCLAT Chairperson for nomination of an appropriate Bench.

The logo of Byju’s, the EdTech startup.
| Photo Credit: Reuters

Indian edtech company Byju’s is staring at insolvency proceedings on July 16 following a tribunal order, deepening a crisis that has seen the one-time market darling’s valuation plunge from about $22 billion to less than $2 billion.

Byju’s, which describes itself as the “world’s largest education technology company”, offers online tutorials on several subjects including math, physics and chemistry for school students. Its business boomed during the Covid-19 pandemic and the company’s valuation shot up from $5 billion before the pandemic to $22 billion in 2022, and it acquired several companies on the way.

It is run by its founder, Byju Raveendran, and his wife, Divya Gokulnath. Mr. Raveendran, an engineer by training whose parents were teachers, started teaching mathematics to friends and built the business as its popularity grew. He launched Byju’s in 2011 and its app in 2015.

Here is an overview of Byju’s and its troubles:

What triggered the insolvency?

The BCCI last year asked a tribunal to initiate insolvency proceedings against Byju’s for defaulting on $19 million of dues. The dispute is over payments related to sponsorship rights for the Indian cricket team’s jerseys.

Byju’s has said it wants to settle the matter, but a tribunal ruled in favour of BCCI, and appointed a resolution professional to oversee the company, suspending its board of directors.

What’s the tussle with investors?

In February, a group of shareholders, including tech investor Prosus, alleged “financial mismanagement and compliance issues” at Byju’s and called for the removal of founder and CEO Byju Raveendran, and a reconstitution of the board. “We are deeply concerned about the future stability of the company under its current leadership and with the current constitution of the Board,” the shareholders said.

Byju’s, which has denied mismanagement, says the investors don’t have the power to vote out its CEO.

In June, Prosus wrote off the value of its 9.6% stake in Byju’s, making the Dutch firm the first to fully write-off its investment in the troubled startup.

Why did Deloitte, board members resign?

Last year, Deloitte said it was resigning as auditor because the startup had delayed financial statements for the year ending March 31, 2022. Deloitte said it did not receive the necessary documents even after writing several letters to the board.

Three board members of Byju’s — representing investors Peak XV Partners (previously Sequoia Capital India), Prosus and Chan Zuckerberg Initiative — also stepped down.