The National Company Law Appellate Tribunal (NCLAT) has reportedly postponed its decision on approving the INR 158 Cr settlement between BYJU’S and the Board of Control for Cricket in India (BCCI) after the embattled edtech startup’s US-based lenders raised allegations, questioning the source of the capital.

As per Moneycontrol’s report, the lenders requested the tribunal not to accept the settlement, calling it a “tainted settlement”. They also alleged that the settlement amount is from “stolen money”.

As a result, NCLAT has asked the founder Byju Raveendran to ensure that the source of the money was not tainted and that no court orders were violated in obtaining the capital.

The development follows the report of BYJU’S reportedly transferring INR 50 Cr to the BCCI as part of the first tranche of payments to settle the ongoing insolvency dispute. 

This 50 Cr settlement was reportedly made via Byju Raveendran’s brother Riju Raveendran and the remaining INR 83 Cr lot was scheduled to be paid by August 8, the reports added. 

Citing the findings of a US court, senior advocate Mukul Rohatgi who represents the US lenders added that both Byju and Riju conspired to siphon off over INR 500 Cr. 

As per Bar and Bench’s report, Rohatgi said that this settlement money belonged to the US lenders. “And now the debtor is offering to pay off the dues of 158 crores. It is our money that has been withdrawn by these fellows.” 

Meanwhile, senior advocate Harish Salve who represents the BCCI also assured that the cricket control authority would never accept any tainted money.

Alongside this, Solicitor General of India Tushar Mehta, who is also representing BCCI, pointed out that the creditor’s concerns were based on assumptions.

“They (creditors) have argued before me that don’t believe Riju Raveendran. Then they showed me the US order of prohibitory injunction on the use of that 533 million,” NCLAT was quoted as saying in the report.

Seeking relief on the development, Byju Raveendran’s counsel replied that some assurance should be given to ensure that the insolvency process against BYJU’S does not come in the way of the proposed settlement.

It is pertinent to note that earlier this month NCLT admitted the BCCI’s plea to initiate the corporate insolvency resolution process against BYJU’S for not paying the dues to the tune of INR 158.9 Cr to the cricket body for a sponsorship deal.

Following this, Raveendran took the matter to the Karnataka High Court to suspend the NCLT order. However, the HC headed by a single bench of Justice S R Krishna Kumar disposed of Raveendran’s plea. 

This comes at the heart of multiple other entities, including BYJU’S US-based Term Loan B lenders, also filing insolvency petitions against the beleaguered company in the past.

BYJU’S, once the poster child of the Indian startup ecosystem, is battling multiple issues, including mass layoffs, a severe cash crunch, delay in filing financial statements, a slew of legal cases and mounting regulatory scrutiny. Making matters worse is a public spat with investors even as losses continue to mount for the company.

BYJU’S net loss surged 81% year-on-year YoY to INR 8,245.2 Cr in FY22.

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Troubled edtech major BYJU’S reportedly transferred INR 50 Cr to the Board of Control for Cricket in India (BCCI) as part of the first tranche of payments to settle the ongoing insolvency dispute. 

The edtech major made the payment to the cricket board on Tuesday (July 30) evening, Bloomberg reported, citing sources.

The development followed the National Company Law Tribunal (NCLT) admitting the BCCI’s plea to initiate the corporate insolvency resolution process against BYJU’S for not paying the dues to the tune of INR 158.9 Cr to the cricket body for a sponsorship deal.

Post the payment, the startup would still be liable for payments worth INR 108.9 Cr to the BCCI. 

As per a separate Reuters report, the edtech major was planning to pay the outstanding amount to BCCI in three installments, starting with an upfront payment of INR 50 Cr. It also said that the terms of the settlement were still under consideration and could change. 

Earlier on Tuesday, BYJU’S informed the National Company Law Appellate Tribunal (NCLAT) about its plans to pay a part of the dues to the cricket board. 

Arguing for BYJU’S before the NCLAT, lawyer Arun Kathpalia said that the company had “almost resolved” a dispute over unpaid fees to the BCCI. 

As per the Bloomberg report, a lawyer for the BCCI also confirmed before the appellate tribunal that both parties were engaged in settlement talks. The NCLAT will next hear the matter on Wednesday (July 31).

The payment of the first tranche is expected to offer some respite for BYJU’S and stave off the insolvency crisis for some time now. It is part of the startup’s efforts to help founder and CEO Byju Raveendran gain complete control of the company again.

However, the case is expected to continue and will only be dropped after BCCI officially informs the tribunal that it was withdrawing its case.

It is also pertinent to note that multiple other entities, including BYJU’S US-based Term Loan B lenders, have also filed insolvency petitions against the beleaguered company in the past.

BYJU’S, once the poster child of the Indian startup ecosystem, is battling multiple issues, including mass layoffs, a severe cash crunch, delay in filing financial statements, a slew of legal cases and mounting regulatory scrutiny. Making matters worse is a public spat with investors even as losses continue to mount for the company. 

BYJU’S net loss surged 81% year-on-year YoY to INR 8,245.2 Cr in FY22. 

The post BYJU’S Pays First Tranche Of INR 50 Cr To BCCI As It Looks To Settle Insolvency Case appeared first on Inc42 Media.

In another setback for the embattled edtech startup BYJU’S founder Byju Raveendran, the Karnataka High Court today disposed of his appeal to suspend National Company Tribunal (NCLT) order, which admitted insolvency resolution process earlier this month. 

The matter was heard by a single bench of Justice S R Krishna Kumar. After understanding that a special bench constituted by National Company Law Appellate Tribunal (NCLAT) is already hearing the matter, the judge reportedly disposed of Raveendran’s plea. However, the court granted Raveendran a liberty to revive the petition later. 

“Having regard to the undisputed fact that appeal is filed before NCLAT and it has been taken up for consideration today and kept for hearing tomorrow. Petition is disposed off with liberty to revive the petition if occasion arises,” the judge was quoted as saying by a LiveLaw report.

While Raveendran’s appeal to the Karnataka HC went without avail today, proceedings at NCLAT didn’t bear much fruit for the troubled startup. According to reports, the Board of Control for Cricket in India (BCCI) informed the tribunal’s bench today that it is in initial settlement talks with Byju Raveendran to settle the dispute.

On account of these preliminary discussions, the solicitor general Tushar Mehta, who appeared for BCCI, suggested the matter to be heard on July 31, which the tribunal agreed upon. 

Meanwhile, the company’s US based lenders also added to the courtroom drama for the crushed startup. Counsel appearing for them sought to appeal the NCLT’s order disposing of their insolvency plea as BCCI’s insolvency plea had already been admitted. 

The company’s tryst with NCLAT yesterday led to another setback for it when NCLAT’s justice Sharad Kumar Sharma recused himself from hearing the former’s plea challenging the order to initiate bankruptcy proceedings against the edtech firm.

At the heart of the issue is the NCLT’s order which admitted BCCI’s petition to initiate the corporate insolvency resolution process (CIRP) against BYJU’S for not paying the dues to the cricket board. BYJU’S owes INR 158.9 Cr to BCCI for sponsorship of the Indian cricket team.

Meanwhile, it disposed of the insolvency plea initiated by the company’s US based lenders, represented by GLAS Trust, on July 16. While disposing of the plea, the NCLT allowed the lenders to put forth their claims before the interim resolution professional (IRP) appointed for the company.

Shortly after the order, Raveendran challenged the tribunal’s decision in front of the Karnataka HC. In his filing, he said that the move will also result in a “total shutdown” of the edtech startup’s operations. The court dismissed the plea shortly afterwards, which led the startup to knock on the doors of the NCLAT.

The post BYJU’S Courtroom Drama: Karnataka HC Disposes Of Byju Raveendran’s Plea appeared first on Inc42 Media.

BYJU’S founder Byju Raveendran suffered further setback as justice Sharad Kumar Sharma of the National Company Law Appellate Tribunal recused himself from hearing the former’s plea challenging the order to initiate bankruptcy proceedings against the edtech firm.

In his order dated July 29, Justice Sharma admitted that he had appeared as a senior counsel for the Board of Control For Cricket in India (BCCI) in the past, Moneycontrol reported.

“Since they are the main beneficiaries of this order, I cannot take this up,” Justice Sharma was quoted as saying by the publication.

The case will now be heard by NCLAT chairperson (retd) Ashok Bhushan.

With the NCLAT having deferred Raveendran’s plea on the recusal of a member, BYJU’S is facing a potential takeover by the Committee of Creditors.

This comes just days after the Karnataka High Court deferred hearing on Raveendran’s plea challenging the National Company Law Tribunal’s (NCLT) order to initiate bankruptcy proceedings against the embattled edtech firm.

The Karnataka HC has listed the plea for hearing on July 30.

Earlier this month, Raveendran moved the Karnataka HC after the NCLT started bankruptcy proceedings against BYJU’S on a BCCI’s plea over unpaid dues of about INR 158 Cr.

Raveendran argued before the Karnataka HC that the insolvency proceedings initiated against the startup will likely “force” thousands of its employees to quit.

In September last year, the BCCI dragged BYJU’S to the NCLT, seeking initiation of corporate insolvency resolution process against the edtech company under section 9 of Insolvency & Bankruptcy Code, 2016 over the dispute around the sponsorship rights of the Indian cricket teams’ jerseys.

BYJU’S has been mired in troubles for quite some time now, facing problems such as shrinking revenues, funding vacuum and consequent mass layoffs and legal trouble with the NCLT and probe by the Enforcement Directorate.

In June, the Ministry of Corporate Affairs said that the probe into potential governance lapses at BYJU’S was still “ongoing”.

Earlier this month, Inc42 reported that the edtech giant has been locked out of more than 100 BYJU’S Tuition Centres (BTC) across the country over unpaid rent and utility bills.

Recently, Qatar Investment Authority (QIA), a sovereign wealth fund and investor in BYJU’S, moved the Karnataka HC to compel Raveendran to disclose and block the transfer of his personal assets. QIA has claimed up to $235.19 Mn of Raveendran’s personal assets.

The post NCLAT Judge Recuses From Hearing Byju Raveendran’s Plea Against Bankruptcy Order appeared first on Inc42 Media.

Update | July 26, 6:00 PM

In yet another setback to BYJU’S founder Byju Raveendran, the Karnataka High Court has deferred hearing on his plea challenging the National Company Law Tribunal’s order to initiate bankruptcy proceedings against the embattled edtech firm.

This comes just a day after Raveendran moved the Karnataka High Court against the NCLT’s order to initiate corporate insolvency  resolution process against the company, alleging bias.

Original Story | July 25, 8:39 PM

In the latest development in the ongoing BYJU’S saga, its founder Byju Raveendran has moved a fresh writ petition in the Karnataka High Court (HC) against the National Company Law Tribunal’s (NCLT’s) order to initiate bankruptcy proceedings against the edtech startup. 

In his petition, Raveendran has requested the HC to suspend the NCLT order until the National Company Law Appellate Tribunal (NCLAT) takes up the company’s appeal against the former’s order.

“The NCLAT bench has adjourned my appeal to another date to decide on whether one of the judges will have to recuse from the plea. If the Committee of Creditors is formed meanwhile, I will be left remediless, it will become irreversible,” senior advocate Abhishek Manu Singhvi, who is representing Raveendran, argued before the HC, as per a Moneycontrol report.

Earlier this month, the Bengaluru bench of the NCLT admitted the Board of Control for Cricket in India’s (BCCI’s) insolvency plea against BYJU’S and ordered to initiate the corporate insolvency resolution process against the company. In a separate order, the Tribunal asked the startup’s US-based lenders to stake their claims before the resolution professional appointed for BYJU’S. 

The NCLT’s order on initiating insolvency proceedings have triggered a series of events that threaten the very existence of the once-celebrated edtech unicorn.

This is the second attempt by Raveendran to seek a relief against the NCLT order. Earlier, the HC refused to admit BYJU’S plea against the Tribunal’s order.

Following this, the company moved the NCLAT. The BYJU’S founder is seeking to prevent the formation of a Committee of Creditors (CoC), which would effectively wrest control of the company from its current management.

The legal tussle between BYJU’S and the BCCI stems from a sponsorship deal gone wrong. 

BYJU’S has been fighting on multiple fronts for over a year now. It has been grappling with issues like rising losses, delays in filing financial statements, an acute funding crunch, layoffs, fighting with investors, multiple court cases and insolvency proceedings.

Earlier this month, Inc42 reported that the edtech giant has been locked out of more than 100 BYJU’S Tuition Centres (BTC) across the country over unpaid rent and utility bills. 

Meanwhile, Qatar Investment Authority (QIA), a sovereign wealth fund and investor in BYJU’S, has approached the Karnataka HC to compel Raveendran to disclose and block the transfer of his personal assets. QIA is seeking to claim up to $235.19 Mn of Raveendran’s personal assets.

The post [Update] Karnataka HC Defers Hearing On Byju Raveendran’s Plea Challenging NCLT Bankruptcy Order appeared first on Inc42 Media.

The Competition Commission of India has given a green signal to Manipal Health Systems and Ranjan Pai’s MEMG Family Office LLP for the proposed buyout of a stake in BYJU’S-owned Aakash Educational Services.

The CCI confirmed its approval of the acquisition deal through a post on X.

Earlier, ET reported that the board of Aakash has given the nod to the conversion of $300 Mn investment made by Pai in 2023 into equity.

Earlier this year, it was reported that Aakash Institute was set to see Pai emerge as its largest shareholder with a 40% stake buyout.

However, an arbitrator asked BYJU’S to not sell 4 Mn shares of its subsidiary Aakash Educational Services, in April.

The order came in response to MEMG Family Office initiating arbitration proceedings against the edtech startup over breach of terms of a $42 Mn loan, earlier this year.

During the arbitration proceedings, BYJU’S said it couldn’t allot the shares as it failed to obtain approvals from certain investors in time for the transfer of shares to MEMG Family Office.

While the edtech giant BYJU’S is yet to release its FY22 financial report card, its crown jewel – Aakash Educational Services Ltd (Aakash), saw its profit widen by 82% to INR 79.5 Cr in FY22. This marks a significant improvement compared to the INR 43.6 C profit it reported in FY21 on a standalone basis.

The post CCI Gives Nod To Ranjan Pai’s Manipal Group To Acquire Stake In Aakash Educational Services appeared first on Inc42 Media.

Qatar Investment Authority, the sovereign wealth fund of the Middle Eastern nation, has approached the Karnataka High Court to compel embattled edtech startup BYJU’S founder and CEO Byju Raveendran to disclose and block the transfer of his personal assets.

QIA has requested the court to prevent Raveendran from selling, pledging, or transferring his assets. The wealth fund aims to claim up to $235.19 Mn of Raveendran’s personal assets, as per Mint’s report, citing court documents. 

In 2019, the sovereign wealth fund first pumped $150 Mn into BYJU’S and made its second investment in the edtech startup’s $250 Mn funding round, along with other existing backers in 2022.

This comes at a time when the founder of the troubled edtech startup said that the insolvency proceedings initiated against the startup will likely “force” thousands of its employees to resign. 

As per a 452-page filing before the Karnataka High Court, accessed by Reuters, Raveendran said that the move will also result in a “total shutdown” of the edtech startup’s operations. 

This comes at a time when BYJU’S is trying to douse fires on multiple fronts, including a looming debt crisis, a public spat with investors, a cash crunch, mounting losses, mass layoffs, and salary delays. 

Earlier last week, Inc42 reported that the company has been locked out of its more than 100 BYJU’S Tuition Centre (BTC) across the country over unpaid rent and other utility bills. This has deepened the crisis at BYJU’S, which has already been struggling to pay the salaries of its employees.

BYJU’S net loss surged 81% YoY to INR 8,245.2 Cr (close to $1 Bn) in FY22 as WhiteHat Jr and other loss-making acquisitions continued to weigh down the bottom line. In FY22, the startup’s total expenses nearly doubled to INR 13,668 Cr. 

The post QIA Moves Karnataka HC To Compel Byju Raveendran To Disclose His Personal Assets appeared first on Inc42 Media.

Troubled edtech firm BYJU’S has reportedly moved the Karnataka High Court challenging the National Company Law Tribunal order on the Board of Control for Cricket in India’s insolvency plea. However, the court did not admit the plea.

The edtech firm plans to approach the National Company Law Appellate Tribunal (NCLAT) again on Monday (July 22), ET reported.

On July 16, it was reported that the NCLT had admitted BYJU’S parent company, Think and Learn Pvt Ltd, into insolvency due to unpaid dues of INR 158 Cr related to sponsorship rights from the BCCI. 

BYJU’S owes INR 158.9 Cr to the cricket body over a jersey sponsorship deal involving the Indian cricket team.

This comes at a time when Byju Raveendran, the founder and CEO of BYJU’S, reportedly said that the insolvency proceedings initiated against the startup will likely “force” thousands of its employees to resign.

The dispute dates back to 2019 when BYJU’S took over the Indian cricket team’s sponsorship from Chinese smartphone maker OPPO, with the agreement set to run until March 2022. After this period, BYJU’S sought to extend the sponsorship for another year. However, in December 2022, the edtech giant abruptly exited the sponsorship deal with the BCCI, citing financial and regulatory challenges.

In January, lawyers representing BYJU’S moved the NCLT against the BCCI’s plea seeking initiation of the insolvency resolution proceedings against the company and sought intervention of an arbitrator.

BYJU’S argued that the BCCI did not provide any services after the contract termination, making the BCCI’s claims of unpaid dues worth INR 158 Cr invalid as an operational credit, as reported by Inc42. However, the NCLT, in its July 16 order, rejected BYJU’S objections, stating that email communications between the parties indicated the sponsorship arrangement and related services were still in effect until September 15, 2023, and that BYJU’S continued to avail all rights as a sponsor.

The post Karnataka HC Rejects BYJU’S Plea In BCCI Case appeared first on Inc42 Media.

Byju Raveendran, the founder and CEO of troubled edtech juggernaut BYJU’S, has reportedly said that the insolvency proceedings initiated against the startup will likely “force” thousands of its employees to resign. 

As per a 452-page filing before the Karnataka High Court (HC), accessed by Reuters, Raveendran said that the move will also result in a “total shutdown” of the edtech startup’s operations. 

The petition, filed through his counsel MZM Legal, seeks to quash the insolvency proceedings. The plea is also said to detail the possible business impact of the insolvency process on the company.

The HC has listed the matter for hearing on Monday (July 22).

In the plea, Raveendran said that the proceedings will likely cause vendors, who “provide critical services” for the upkeep of the startup’s online platforms, to declare a default. This, he added, could lead to a “total shutdown of services” and bring the edtech’s operations to a “grinding halt”.

Claiming that the edtech’s employees “shall suffer … and may be forced to leave the organisation” if the insolvency process moves ahead, Raveendran claimed he is willing to pay the pending dues to the Board for Control of Cricket in India (BCCI) in the next 90 days. 

The appeal before the HC comes days after the National Company Law Tribunal (NCLT) admitted a plea by the BCCI to commence a corporate insolvency resolution process (CIRP) against the edtech startup. BYJU’S owes INR 158.9 Cr to the cricket body over a jersey sponsorship deal involving the Indian cricket team.

The NCLT appointed Pankaj Srivastava as the interim resolution professional (IRP) and directed him to issue a public notice to invite claims from all creditors. The NCLT also asked the company’s US-based lenders to put forth their claims before the IRP. 

What this means is that Srivastava has taken over the control of the edtech startup and Raveendran has been ousted from the company unless the founder wins an appeal in the case. 

This comes at a time when BYJU’S is trying to douse fires on multiple fronts, including a looming debt crisis, a public spat with investors, a cash crunch, mounting losses, mass layoffs, and salary delays. 

Earlier this week, Inc42 reported that the company has been locked out of its more than 100 BYJU’S Tuition Centre (BTC) across the country over unpaid rent and other utility bills. This has deepened the crisis at BYJU’S, which has already been struggling to pay the salaries of its employees.

The post Insolvency Proceedings Will Force Thousands Of Employees To Quit: BYJU’S CEO appeared first on Inc42 Media.

There’s no end to the bad times at BYJU’S. Three new developments threaten to kill the edtech giant, once the highest-valued startup in India and considered the crown jewel of the Indian startup ecosystem till just three years ago.

• Firstly, the National Company Law Tribunal (NCLT) has admitted a plea by the Board for Control of Cricket in India (BCCI) to initiate a corporate insolvency resolution process (CIRP) against BYJU’S. Another insolvency plea by US-based lenders has also been tacked on to this resolution process.
• Secondly, the company has had to walk away from 100s of its offline coaching centres, as Inc42 reported exclusively this week.
• And third, there are reports that BYJU’S has allegedly not remitted the tax deducted at source (TDS) to the Income Tax department since July last year

Either one of these can lead to an existential crisis for a company, but all three together — and the dozens of other problems at BYJU’S — threaten to bring the Byju Raveendran-led company to its knees. For instance, BYJU’S is also caught in a crisis where investors are looking to step in and wrest control of the company which is said to be out of funds. In a bid to survive for as long as possible, BYJU’S has cut more than 5,000 jobs since 2022.

The company’s many troubles have dented investor confidence considerably, with shareholders taking the company to court over a contentious rights issue, where the company is seeking fresh funds at a post-money valuation of $225 Mn. That’s a 99% drop from its valuation of $22 Bn in 2022.

But in particular, it is the NCLT order that can change the entire course of the company, which claims it is in discussions with the cricketing body for a settlement.

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

As per a Reuters report, BYJU’S plans to challenge the NCLT order and will file an appeal in Delhi to block the insolvency proceedings.

In the meantime, the NCLT has appointed insolvency professional Pankaj Srivastava as the interim resolution professional in the BCCI matter. In addition to the plea by the BCCI, Srivastava will also hear the insolvency pleas of US-based lenders of BYJU’S Term Loan B, as ordered by the NCLT earlier this week.

For now, the company has moved the NCLAT to appeal against the insolvency process. There’s no certainty that the appeal will be successful. So what does it mean for BYJU’S and its future, if the CIRP is allowed to go on.

BYJU’S Existential Crisis

As per India’s Insolvency and Bankruptcy Code, 2016 (amended in 2021), the corporate insolvency resolution process or CIRP will commence from the admission date of the application by NCLT. Here’s a snapshot of what the CIRP entails:

While the insolvency resolution process will take several months to be settled, BYJU’S will also face headwinds in its business operations.

As Inc42 reported, the company has had to scale back its offline coaching vertical due to unpaid rent and other utility bills. This is said to have impacted more than 100 outlets out of a total of 260+ such centres that the company operates. Given the halving of this business, BYJU’S is left in a limbo.

It doesn’t help matters that the online learning business cannot make up for the slowdown on the offline front. BYJU’S inside sales efforts have not paid off and the company is running without many of the resources it relied on in the past — such as SaaS tools for CRM and sales monitoring.

Online-first is no longer the edtech DNA. It’s not just BYJU’S that is grappling with challenges in selling online learning. The industry as a whole is seeing some headwinds.

As a CEO of a rival edtech company, which also has a significant presence in the offline space, told Inc42 in May this year, the troubles for BYJU’S have hurt the Indian edtech sector. “We were only able to achieve 40% of the targets set for online courses, while offline coaching has seen more students each year.”

Earlier, upGrad’s Ronnie Screwvala also said, during an address at February’s ASU+GSV & Emeritus Summit, that due to ‘one rotten apple’, the industry is seeing reputational damage.

But the ground reality is that from Physicswallah to Unacademy to Vedantu and other edtech platforms,the focus is on offline and hybrid online-offline models where there is a more clear revenue opportunity. Many of these companies have their own share of problems — Unacademy’s attrition in leadership ranks and PhysicsWallah’s gamble on multiple products — but none of them are in a similar precarious financial position as BYJU’S.

So far, BYJU’S was paying salaries from the revenue it generated from monthly sales, as was seen in May 2024. But given that offline business has now shut down in many locations, can the company actually stay afloat on this monthly revenue collection alone?

Surviving The Insolvency Storm

What makes matters worse for BYJU’S is that any revenue that it books at this point in the year can only be recognised in the next year. “Edtech courses being sold right now are for FY26 now. For FY25, the sales cycle concluded around May 2024, which means that most companies are now targeting the next batch of students. This means revenue can only be recognised for the next year, even if sales are completed at this point in time,” according to the founder of an edtech startup that has offline presence.

Besides this, BYJU’S and edtech in general has suffered a reputation damage in the past two years. As a result, students and parents are preferring traditional offline coaching giants over edtech startups with hybrid operations.

Reports claimed the monthly salary burn for BYJU’S in April 2024 was between INR 40 Cr ($5 Mn) to INR 50 Cr ($6 Mn). Besides this, the company is saddled with a backlog of salary and the dues owed to the various vendors, which we have covered in detail here.

It’s unclear how BYJU’S can be revived, if indeed such a thing is possible. One thing is for certain, the company’s brand image has taken a beating and for the sake of business continuity, this needs to be addressed on priority basis.

Even if there is a settlement reached with the BCCI and the company staves off insolvency proceedings for now, there’s no guarantee that BYJU’S will see a similar positive result with its Term Loan B lenders. There’s also the matter of the rights issue — two separate instances — that is being heard by the Karnataka High Court and the NCLT.

Like we said at the start, this is an existential crisis for BYJU’S. From being heralded as the poster child of the Indian startup ecosystem to a cautionary tale on what not to do, the edtech giant has crashed and this is not just a matter of raising funds to extend the runway and keeping the business going.

As we have seen over the past year — ever since three directors and an auditor resigned prematurely — the current crisis is about a series of bad decisions by Byju Raveendran and the management over the years. Besides Raveendran and cofounder Divya Gokulnath, the large number of global investors and VC funds who invested in the edtech giant also need to introspect about what went wrong.

We will be looking at the investor side of things next as the BYJU’S saga plays out. What exactly will the shareholders be left with if the company goes under the auction hammer? And is there a sense that they could have arrested BYJU’S slide much before the company entered this crisis?

The post BYJU’S Vs Bankruptcy: Will The Edtech Giant Survive The Existential Insolvency Crisis? appeared first on Inc42 Media.

Troubled edtech giant BYJU’S has reportedly moved the National Company Law Appellate Tribunal (NCLAT) challenging an order which directed initiation of insolvency proceedings against the firm.

The appellate tribunal will likely hear BYJU’S petition on July 22, Moneycontrol reported.

“The company remains solvent with thousands of employees. I am prepared to commit to depositing the entire INR 158 Cr in one installment within one month,” senior advocate Abhishek Manu Singhvi, representing BYJU’S, was quoted as saying by the publication.

This comes days after the Bengaluru bench of the National Company Law Tribunal (NCLT) admitted the Board of Control for Cricket in India’s petition seeking insolvency proceedings against the edtech giant over alleged unpaid dues of about INR 158.9 Cr.

Additionally, the NCLT appointed an interim resolution officer to oversee the company’s operations until a Committee of Creditors (COC) is formed.

Inc42 reported earlier that BYJU’S was looking to challenge the NCLT order.

In September last year, the BCCI dragged BYJU’S to the NCLT, seeking initiation of corporate insolvency resolution process against the edtech company under section 9 of Insolvency & Bankruptcy Code, 2016 over the dispute around the sponsorship rights of the Indian cricket teams’ jerseys.

At the time, the BCCI alleged that BYJU’S had not cleared a debt of around INR 158 Cr.

The dispute dates back to 2019 when BYJU’S assumed the sponsorship of the Indian cricket team from Chinese smartphone maker OPPO – a commitment that was supposed to last till March 2022.

At the end of this period, BYJU’S sought an extension of the sponsorship deal for another year. However, the edtech giant unceremoniously exited the sponsorship deal with the BCCI around December 2022, citing financial and regulatory challenges.

In January 2024, lawyers representing BYJU’S moved the NCLT against the BCCI’s plea seeking initiation of the insolvency resolution proceedings against the company and sought intervention of an arbitrator.

They contended that the BCCI did not render any service after the termination of the contract between the two parties, and therefore the BCCI’s claims of unpaid dues worth INR 158 Cr from BYJU’S cannot be considered as an operational credit, Inc42 reported earlier.

However, the NCLT in its July 16 order rejected BYJU’S objections to BCCI’s plea, saying that email communications between the two parties showed that the sponsorship arrangement and related services were still in force till September 15, 2023 and that BYJU’S continued to avail all rights of being a sponsor.

Further, the NCLT has set aside the insolvency plea filed by US-based lenders of BYJU’S and asked them to stake their claims to the interim resolution professional appointed for the company.

The post BYJU’S Moves NCLAT To Challenge Insolvency Proceedings Against The Firm appeared first on Inc42 Media.

Update | July 17, 1:53 PM

Caught in a whirlwind of regulatory troubles, beleaguered edtech startup BYJU’S is now seeking to contest the recently admitted insolvency proceedings. Sources told Inc42 that the startup will file an appeal against the insolvency plea admitted by the NCLT within this week. Reuters was the first to report the development.

The Bengaluru bench of the National Company Law Tribunal (NCLT) has admitted the Board of Control for Cricket in India’s (BCCI) petition seeking insolvency proceedings against edtech giant BYJU’S over alleged unpaid dues of about INR 158.9 Cr.

The tribunal has appointed Pankaj Srivastava as interim resolution professional for BYJU’S insolvency process and directed him to issue a public notice to invite claims from all creditors. As per NCLT’s ruling, Srivastava will run the company’s operations until a Committee of Creditors (COC) is constituted. 

“… the existence of a debt and a default in the payment of debt is clearly established,” observed the division bench of judicial member K Biswal and technical member Manoj Kumar Dubey in its order dated July 16.

The order comes months after the BCCI in September 2023 dragged BYJU’S to the NCLT, seeking initiation of corporate insolvency resolution process against the edtech company under section 9 of Insolvency & Bankruptcy Code, 2016 over the dispute around the sponsorship rights of the Indian cricket teams’ jerseys.

The BCCI alleged at the time that BYJU’S had not cleared dues worth more than INR 158 Cr.

The dispute dates back to 2019 when BYJU’S assumed the sponsorship of the Indian cricket team from Chinese smartphone maker OPPO – a commitment that was supposed to last till March 2022.

At the end of this period, BYJU’S sought an extension of the sponsorship deal for another year. However, the edtech giant unceremoniously exited the sponsorship deal with the BCCI around December 2022, citing financial and regulatory challenges. 

In January, lawyers representing BYJU’S contended before the NCLT that the insolvency resolution proceedings against it cannot continue till the matter is decided by an arbitrator.

They argued that the BCCI did not render any service after the culmination of the contract between the two parties. Thus, the BCCI’s claims of pending dues to the tune of INR 158 Cr from BYJU’S cannot be considered as an operational credit, Inc42 reported earlier.

However, the NCLT has rejected BYJU’S objections to BCCI’s plea, saying that email communications between the two parties showed that the sponsorship arrangement and related services were still in force till September 15, 2023 and that BYJU’S continued to avail all rights of being a sponsor.

“Considering the facts as stated above, is naïve to assume and argue on the part of the Corporate Debtor that for so many services the Corporate Debtor were allowed to continue as the Sponsor and also availed all the rights/services, without having any liability towards the Operational Creditor for the payment of requisite fees for the same,” the order said.

Meanwhile, Moneycontrol, citing sources, reported that BYJU’S may try to get a stay on the NCLT order and attempt to settle its dispute with the BCCI outside the court.

The development comes at a time when BYJU’S is facing setbacks on multiple fronts from declining revenues to funding vacuum and consequent mass layoffs to legal trouble with the NCLT and a probe by the Enforcement Directorate.

Earlier this month, the NCLT warned BYJU’S that it might face an audit if the edtech company fails to clear overdue salaries of its employees.

Bengaluru-based law firm Canvas Legal has issued the demand notice of over INR 2.3 Cr on behalf of 62 former employees of BYJU’S, warning that it will initiate insolvency proceedings against the startup if it fails to clear the unpaid dues within 10 days of receiving the notice.

Earlier today, Inc42 reported that BYJU’S has been locked out of over 100 of its tuition centres over alleged unpaid rent and electricity bills.

The post [Update] NCLT Admits BCCI’s Insolvency Plea Against BYJU’S; Startup To Challenge appeared first on Inc42 Media.

The Bengaluru bench of the National Company Law Tribunal (NCLT) on Tuesday (July 16) disposed of the insolvency plea filed by embattled edtech giant BYJU’S US-based lenders and asked them to put forth their claims before the interim resolution professional (IRP) appointed for the company.

Earlier today, the Tribunal admitted the Board of Control for Cricket in India’s (BCCI’s) petition to initiate the corporate insolvency resolution process (CIRP) against BYJU’S for not paying the dues to the cricket board.

In its order in the case of the US-based lenders, the NCLT said that the petitioner GLAS Trust Company LLC is at liberty to put forth its claims before the IRP.

GLAS Trust represents over 100 lenders who provided money to the US-based entity of BYJU’S, which is currently struggling with bankruptcy hearings at a court in Delaware. BYJU’S had stood a guarantee for the loan of $1.2 Bn (about INR 8K Cr).

In its order, the Tribunal also granted GLAS Trust the liberty to seek restoration of its petition, “depending on the subsequent developments in the matter at the Appellate level”.

In the BCCI’s case, the Tribunal appointed Pankaj Srivastava as the IRP and directed him to issue a public notice to invite claims from all creditors. BYJU’S owes INR 158.9 Cr to BCCI for sponsorship of the Indian cricket team.

The development comes at a time when BYJU’S is dousing fires on multiple fronts. From delays in filing financial statements, mounting losses, and multiple insolvency proceedings to regulatory scrutiny, layoffs, and a severe cash crunch, there seems to be no end to BYJU’S troubles. 

To add to this, BYJU’S has been locked out of more than 100 BYJU’S Tuition Centre (BTC) across the country. Inc42 reported earlier today that the action was taken by the owners of the properties as the startup failed to pay rent as well as utilities bills for the past three months.

BYJU’S has been banking on its rights issue to revive the startup. However, the proceedings from the rights issue have been kept in an escrow account on the NCLT’s order. Besides, it couldn’t raise the entire $200 Mn amount from the rights issue and was looking to launch a second rights issue, which is also mired in legal troubles now.

The post NCLT Directs BYJU’S US-Based Lenders’ To Stake Their Claim Before Resolution Professional appeared first on Inc42 Media.

Bengaluru-based edtech startup Simplilearn’s chief product officer Anand Narayanan has stepped down from his position after his 8-year stint with the company.

“After an absolutely amazing 8+ years with Simplilearn as their Chief Product Officer, I have decided to move on and find my next passion project. “why?” you may ask…sometimes the “why” is simply that you realise that someone else can take your role and bring a lot more energy to it since you have been doing it for a bit too long,” Narayanan said in a Linkedln post.

“As a shareholder and well wisher of the company I couldn’t see past that…so it is time to move on and retain that passion and energy in me that my team respects and values,” he added.

Although he did not divulge any details on his next venture, he hinted at changing industry. “ I am quite energised by the thought of changing industries (for the 5th time) and getting back to a lot of personal learning and growth. Edtech has been kind to me..but it’s time for another personal disruption!,” he said.

Narayanan joined the edtech venture in 2016 as vice president, product and engineering. Later, he was elevated to the position of CPO in 2017. At Simplilearn, he led all product decisions from the day to day tactical to the long-ranging strategic. Before Simplilearn, he worked with Dell, Rackspace, among others.

Founded in 2010 by Krishna Kumar, Simplilearn offers online upskilling courses in segments such as cyber security, cloud computing, project management and data science to students and working professionals.

It also offers courses in association with educational institutions and global organisations like IBM, Microsoft, Amazon, Meta, and KPMG.

In 2021, private equity firm Blackstone acquired a majority stake in the startup for $250 Mn. A year later, Simplilearn raised $45 Mn in a fresh funding round led by venture capital firm GSV Ventures.

Last December, Simplilearn fired around 200 employees citing their poor performance.

The layoffs affected employees at various levels, with the sales team being hit the hardest. Other departments, including marketing and operations, were also impacted by the layoffs.

Simplilearn’s consolidated net loss widened 36.5% in the financial year 2022-23 (FY23) to INR 244.2 Cr from INR 178.9 Cr in FY22, hurt by a sharp rise in certain expense heads.

The Blackstone-backed startup registered a 50.3% rise in its operating revenue to INR 684 Cr during the year under review from INR 455.2 Cr in FY22.

The post Simplilearn’s Chief Product Officer Anand Narayanan Steps Down After 8 Years appeared first on Inc42 Media.

In a yet another setback to BYJU’S, the beleaguered edtech startup has been locked out of more than 100 BYJU’S Tuition Centre (BTC) locations across the country. 

Documents accessed by Inc42 show that owners of the commercial properties housing these BYJU’S centres have evicted the company for unpaid rent and electricity dues over the last 2-3 months. 

BYJU’S Tuition Centre locations in UP, Bihar, Jharkhand, West Bengal are already closed due to such evictions. In other locations, the company is being locked out by the landlords. 

As per the documents seen by Inc42, BYJU’S has not paid water, electricity and garbage collection bills for the tuition centres that are still functional, whereas the rent for these centres is also pending for several months now. 

Queries sent to BYJU’S over the closure of tuition centres didn’t elicit any response. The story will be updated as and when the company responds. 

In March this year, BYJU’S denied the reports of tuition centres shutting down. The company claimed that 262 such tuition centres out of a total of 292 were functional after more than two years of operations. 

As Inc42 reported at the time, under the BYJU’S 3.0 strategy the company had looked to rationalise the costs associated with operating the offline and online learning business. Several BTCs were transformed into hybrid learning centres and the teaching staff was told to take a pay cut and new teachers were hired at low salaries. 

However, sources now claim that this has severely deteriorated the quality of learning and teaching at many of these centres. The rate of new enrollments has slowed down and the company is seeing high student attrition rates as parents have asked for refunds due to the quality concerns and the company being locked out of the tuition centres.  

What This Means For BYJU’S

The BYJU’S Tuition Centre business was launched with much bullishness in February 2022, and at the time, the company claimed it would be investing $200 Mn to expand this vertical. But just over two years later, it seems this bet has failed to bring in the results expected. 

In the past year, offline or hybrid learning has become the lifeline for many edtech companies, including BYJU’S, Unacademy, Vedantu and PhysicsWallah. These unicorns looked to expand their offline presence in test prep and K-12 learning. 

This at a time when the sector has seen a slump in the demand for online courses after the pandemic boom. 

As such, the disruption in the offline business and the BTCs is a massive blow for BYJU’S which is already under the strain of cash crunch, a battle with investors, insolvency cases and unpaid vendor and employee dues. If BYJU’S is forced to scale back from key cities, it would be a crippling setback as the company is already struggling to keep up with its monthly payments, as reported over the past several months. 

Incidentally, just as Inc42 learnt about the disruption in the BYJU’S Tuition Centres business, the National Company Law Tribunal (NCLT) admitted the plea by the Board of Control for Cricket In India (BCCI) for initiating insolvency proceedings against BYJU’S on Tuesday (July 16).

[Edited By Nikhil Subramaniam]

The post Exclusive: Crisis-Hit BYJU’S Locked Out Of Over 100 Tuition Centres Over Unpaid Rent appeared first on Inc42 Media.

Edtech major BYJU’S has reportedly settled its insolvency case with Gurugram-based IT services firm Surfer Technologies.

As per Livemint, the IT firm last week informed the National Company Law Tribunal (NCLT) that it has reached an amicable settlement with BYJU’S and hinted that it would withdraw its insolvency application against the edtech firm. 

Eventually on Monday (July 15), the tribunal asked both parties to file a formal application in this regard as the NCLAT had previously reserved an order in connection with the insolvency petition filed by Surfer Technologies.

BYJU’S declined to comment on Inc42’s queries on the matter.

In February 2024, Surfer Technologies filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 to initiate insolvency proceedings against BYJU’S. Surfer Technologies, which offered IT-related services to the edtech major’s customer care and sales teams in India, argued before the NCLT that BYJU’S owed it INR 2.3 Cr.

“We were the digital marketing vendors. We would send them leads and only after they confirm a lead, we would raise an invoice. They remained unpaid to date,” Surfer Technologies’ counsel reportedly argued before the tribunal.

Later, the NCLT issued a notice to BYJU’S in February seeking its response in connection with the insolvency plea. In April, the tribunal reportedly fined the troubled startup INR 20,000 for delays in replying to Surfer Technologies’ petition. 

Two months later, the two parties have agreed to settle the case.  

It is pertinent to note that the latest development comes weeks after BYJU’S informed the NCLT that it had reached a settlement with France-based Teleperformance Business Services in connection with another insolvency petition involving dues to the tune of INR 5 Cr. 

Teleperformance last month withdrew the petition after settling the case with the edtech startup. 

BYJU’S is also grappling with other insolvency pleas filed by investors General Atlantic and MIH Edtech over alleged oppression and mismanagement at the edtech platform. Additionally, there are other legal cases also filed by investors and creditors against BYJU’S that are currently pending before various courts. 

The settlement is expected to offer some relief to the troubled edtech juggernaut, which is currently dousing fires on multiple fronts, including a severe funding crunch, a looming debt crisis, mass layoffs, mounting losses, top-level attrition, and delays in filing audited financial statements.

BYJU’S saw its consolidated net loss surge 81% to INR 8,245.2 Cr in the fiscal year 2021-22 (FY22) from INR 4,564.3 Cr in the previous year. Meanwhile, operating revenue jumped over 120% year-on-year (YoY) to INR 5,014.6 Cr in the fiscal year ended March 2022. It is yet to file its financial statements for FY23. 

The post After Teleperformance, BYJU’S Settles Insolvency Case With Surfer Technologies appeared first on Inc42 Media.

Gaurav Munjal-led Unacademy is undergoing a major overhaul. Weeks after its cofounder Hemesh Singh stepped away from the edtech giant, Inc42 has now learnt that the startup’s chief operating officer (COO) for offline centres, Jagnoor Singh, is moving out. 

Singh will be serving his notice period and will be in a transition phase for the next six months, sources said. The edtech unicorn is unlikely to hire a replacement for Singh, and cofounder Gaurav Munjal and newly-elevated cofounder Sumit Jain will oversee the offline business.

“The founders are taking control of the business to attain the company’s goals. The company intends to go public and the business needs to be run more efficiently. Afterall, Unacademy intends to have a sustainable growth and achieve profitability,” one of the sources said. 

Inc42 has learnt that Singh, during his tenure at Unacademy, reported to either Munjal or Jain.

Queries sent to Unacademy remained unanswered till the time of publishing this story.

The development comes a little over a month after Unacademy cofounder and chief technology officer Hemesh Singh announced his decision to take a back seat after being with the startup for more than eight years. 

Unacademy’s partner Sumit Jain replaced Hemesh Singh as the cofounder and also has a seat on the startup’s board. Last year, Jain, who was then the CEO of Graphy, was elevated to a partner role. Munjal had then said that the cofounder role and a partner role are almost similar. 

Hemesh Singh, along with Munjal and Roman Saini, founded Unacademy in 2015. The Bengaluru-based company claims to have a network of 91K registered educators (teachers) and over 99 Mn learners.

Unacademy is in the midst of an aggressive cost-cutting exercise currently to turn profitable. Earlier this month, Inc42 reported that the startup fired 250 employees in a fresh restructuring exercise. While 150 employees were from the sales department, who were fired for not being able to meet their “sales targets”, the remaining 100 employees were from various other departments, sources told Inc42 then. 

Earlier in May, Inc42 exclusively reported that the startup’s medical entrance test preparation platform PrepLadder undertook a layoff exercise amid a shift in its sales strategy. The NEET preparation platform laid off around 145 employees, which was almost 25% of its workforce. It was PrepLadder’s third round of layoffs in the past three years.

Besides, K-12 Techno Services has also held talks with Unacademy to acquire the latter. However, the talks are currently in initial stages. 

Peak XV Partners-backed Unacademy narrowed its consolidated net loss by almost 40% to INR 1,678.1 Cr in the financial year 2022-23 (FY23) from INR 2,847.9 Cr in the previous year, on the back of a sharp reduction in costs.

Unacademy Group has raised about $800 Mn in funding till date. Last valued at $3 Bn, the startup counts Tiger Global, Elevation Capital, General Atlantic, and Meta among its backers.

The post Exclusive: Unacademy COO Jagnoor Singh Quits, Gaurav Munjal & Sumit Jain To Take Charge appeared first on Inc42 Media.

Higher education services platform CollegeDekho has raised $9 Mn from its existing investors in its extended Series B round, sources told Inc42.

While Inc42 couldn’t verify the name of the investors, the sources said that CollegeDekho’s existing investors invested in the startup via a special purpose vehicle (SPV).

Winter Capital Partners (acquired by Rockstone Ventures), ETS Strategic Capital, Calega, QIC, and Man Capital are among the existing investors of the startup.

CollegeDekho raised the latest funds at a valuation of $138 Mn, unchanged from its last valuation.

The startup last raised $9 Mn from Winter Capital Partners in its Series B funding round in December 2022.

A detailed questionnaire sent to CollegeDekho on the latest funding round didn’t elicit any response till the time of publishing this story. 

Founded in 2015 by Ruchir Arora, Saurabh Jain, Rohit Saha, and Rajiv Singh, CollegeDekho provides a gamut of services in the higher education segment, including test preparation, college selection, and application assistance. 

The startup expanded its business by making a few acquisitions in 2022. In February 2022, it announced acquisition of edtech platforms Getmyuni and IELTSMaterial at around INR 50 Cr. Just a month after this, it acquired PrepBytes in a cash and equity deal to scale up its offerings. 

CollegeDekho claims to have counselled more than 70 Lakh students till date and worked with close to 1,500 colleges. The startup also claims to have got more than 16 Cr visitors on its multiple higher education discoverability platforms.

Overall, CollegeDekho has raised a total funding of over $90 Mn till date. 

The startup clocked a revenue of INR 239 Cr in the financial year 2023-24 (FY24), Inc42 has learnt. In FY23, it incurred a standalone loss of INR 120 Cr on a revenue of INR 141 Cr. 

It is pertinent to note that the startup is yet to file its financial statements for FY24 with the Ministry of Corporate Affairs.

CollegeDekho competes against the likes of LeverageEdu, CollegeDunia, Embibe, and GetMyUni

The post Exclusive: CollegeDekho Raises $9 Mn From Existing Investors appeared first on Inc42 Media.

The Karnataka High Court has restricted embattled edtech startup BYJU’S from making allotment of shares pursuant to its rights issue and await the final decision from the National Company Law Tribunal (NCLT).

The court also ordered that the status quo be maintained until the NCLT makes a final decision on the rights issue dispute. Any share allotments made after the single judge’s order on July 2 will be subject to the NCLT’s final decision. 

“During the proceedings of remand and till the decision which may be taken by the NCLT, the parties shall maintain status quo with regard to the subject matter dispute as obtained on today,” the order said. 

It added that the respondents shall not make allotment of shares in the interregnum, to be subject to the final order which may be passed by the NCLT. 

The court also directed the NCLT to decide on the rights issue aspect expeditiously, by July 31.

The rights issue had been objected to by four investors who accused BYJU’S and its parent company, Think & Learn Private Limited, of oppression and mismanagement. Addressing their plea, the NCLT issued an interim order on June 12 to halt the rights issue, as the investors alleged that BYJU’S had violated a prior undertaking not to proceed with any rights issue unless it increased its authorised capital.

On July 2, a Karnataka High Court judge set aside the interim NCLT order, finding merit in BYJU’S and Think & Learn’s argument that the tribunal’s decision was unreasoned. The judge refused to stay the order and sent the case back to the NCLT for a fresh decision within two weeks. 

The investors challenged this refusal through two appeals heard by the court this morning.

The order added, “It is clarified that this Court has not gone into the merits of the case of the appellant and has not expressed any opinion on merits. Any observations in this order shall not be construed as an expression on merits.”

BYJU’S, once the poster child of the edtech ecosystem, is currently in the news for all the wrong reasons. From multiple insolvency cases, allegations of hiding funds, and rising losses to a severe cash crunch, fight with investors, and layoffs – the startup is dousing fires on multiple fronts.

The post Karnataka HC Restricts BYJU’S From Making Allotment Of Shares, Asks To Maintain Status Quo appeared first on Inc42 Media.

In a fresh trouble for embattled edtech firm BYJU’S, 62 former employees have now joined hands and sent a notice to initiate an insolvency and bankruptcy case against the company if it doesn’t pay their salary dues. 

Bengaluru-based law firm Canvas Legal has issued the demand notice of over INR 2.3 Cr to BYJU’S on behalf of the employees.

Ankur Tripathi, partner at Canvas Legal, told Inc42, “We have sent a Section 8 notice to BYJU’S on behalf of these employees making a claim that is cumulatively above INR 2.3 Cr. We are expecting a reply from BYJU’S. We have given them 10 days time as per the IBC (Insolvency And Bankruptcy Code). If BYJU’S fails to respond, we are all set to go to the NCLT (National Company Law Tribunal) with an insolvency petition.”

A copy of the notice, sent on July 4 and accessed by Inc42, read, “The undersigned request you to unconditionally repay the unpaid operational debt (in default) in full within 10 days from the receipt of this letter, failing which we shall initiate corporate insolvency resolution process in respect of M/s Think & Learn Pvt Ltd (Byju’s parent).” 

Around 1,500 former employees of BYJU’S have joined hands to fight against the company, demanding their dues. However, everyone couldn’t join to send the legal notice to the company due to certain monetary constraints, a source informed Inc42.

Business Standard was the first to report the development. 

The development comes days after Karnataka Labour Minister Santosh Lad asked BYJU’S to settle the overdue salaries of at least 50% of its former employees “at the earliest”.

Karnataka’s labour department has received hoards of complaints from about 160-200 former BYJU’S employees who have alleged that the edtech firm has not settled dues worth nearly INR 4.5 Cr owed to them, even months after their termination.

Meanwhile, the NCLT has also asked the edtech startup to pay salaries to its employees, irrespective of whether it has access to the funds raised via its rights issue or not. 

The Karnataka High Court on the other hand has lifted the NCLT’s restriction on BYJU’S from undertaking a second rights issue, which came as a major relief to the cash-starved startup.

Meanwhile, BYJU’S is yet to pay the complete salaries of its employees for the months of February and March. 

The latest development adds to the long list of troubles that the embattled startup is facing. While some of its investors have taken the legal route to stop the company’s rights issue, it is also facing insolvency pleas from the Board of Control for Cricket in India (BCCI), OPPO, among others. 

Besides, it is also dealing with issues like mounting losses, delays in filing financial statements, layoffs, allegations of hiding funds, and probes by the Institute of Chartered Accountants of India (ICAI) and the Ministry of Corporate Affairs (MCA).

The post Former Employees Ask BYJU’S To Pay INR 2.3 Cr Salary Dues Or Face Insolvency Proceedings appeared first on Inc42 Media.

The Bengaluru bench of the National Company Law Tribunal (NCLT) has told embattled edtech startup BYJU’S to pay salaries to its employees, irrespective of it having access to the funds raised via its rights issue or not.

“You are a company that is functioning. Surely you should be having revenues,” the bench said, according to a Moneycontrol report. 

The tribunal also warned the company of an audit by the Institute of Chartered Accountants of India if it fails to pay its staff.

It is pertinent to note that the ICAI is already conducting an investigation into the affairs of the fallen edtech giant. 

While it is yet to file a detailed report, ICAI’s president Ranjeet Kumar Agarwal said that the investigation led to the discovery of “gross negligence on accounting practices by individual auditors”.

The Tribunal was scheduled to hear a total of nine petitions filed in the matter today, two of which were filed by BYJU’s chief people officer Pravin Prakash, along with 25 other company personnel, against MIH Edtech Investments B.V. and 16 other investors of the company. Sources told Inc42 that the petitions were just a bid by the edtech company to appeal to the court to access the funds raised during its infamous rights issue. 

The company is yet to pay the complete dues of its employees for the months of February and March. Post March, the company claims to be on track with employee payments. Despite this, clearing employee dues has been a headache for the company. 

Facing fires from all ends, the company has also shed a substantial amount of its workforce in recent times. In April, it fired another 500 employees as part of its “ongoing restructuring exercise”. This exercise has seen thousands of people lose their jobs. It is pertinent to note that the company is yet to clear the dues of a significant amount of its employees as of now.

The case of the missing FnFs also got the attention of Karnataka Labour Minister Santosh Lad, who asked the company to settle the issue at the earliest just yesterday. During a meeting with the representatives of BYJU’S parent entity Think and Learn Pvt Ltd, the minister directed the company to settle at least 50% of the dues owed to former employees as soon as possible. 

In response, the company explained that it was not being able to clear employee dues as they were in an escrow account under the direction of the tribunal. NCLT has barred BYJU’S from using the proceeds from the “second rights issue” and asked it to park the funds raised from the first rights issue in a separate account till the settlement of the case.

Yesterday, the Karnataka High Court (HC) set aside the interim order restraining embattled BYJU’S from undertaking a second rights issue and sent the matter back to the tribunal for a fresh consideration. NCLT is set to reconsider the ordeal tomorrow, according to Bar and Bench.

The post NCLT’s Ultimatum To BYJU’S: Pay Employee Salaries Or Face Audit appeared first on Inc42 Media.

Embattled edtech startup BYJU’S has requested for 48 hours from the National Company Law Tribunal to decide whether it should undertake not to pledge, sell or transfer its assets amid a dispute with investors.

“I don’t know what my client (Byju’s) wants to do but I will obtain instructions from them on whether such an undertaking can be given,” BYJU’S senior counsel KG Raghavan told the tribunal, as reported by Moneycontrol. 

The lawyer’s statement was in response to an application filed by the company’s US-based lenders who want the firm to be restrained from alienating its shares.

As per another report by NDTV, this plea stemmed from Glas Trust Company LLC, representing over 100 lenders to BYJU’s US entity, BYJU’S Alpha Inc., which is undergoing bankruptcy proceedings in Delaware. Glas Trust seeks to prevent BYJU’S from alienating its shares during this period. 

BYJU’S confirmed the development to Inc42. The case will be heard on July 9 after the NCLT is informed of BYJU’s decision on the undertaking.

This comes a day after the Karnataka High Court reportedly set aside the NCLT’s interim order, passed last month, restraining BYJU’S from undertaking a second rights issue. Hearing BYJU’S petition against the NCLT’s order, Karnataka HC’s Justice SR Krishna Kumar sent the matter back to the Tribunal for fresh consideration, Bar and Bench reported.

The development also comes at a time when BYJU’S is embroiled in multiple legal cases in courts across India and the US. Disgruntled investors have accused the company of violating the NCLT’s February order.

The story traces its origins to February 2024, when reports surfaced that the edtech major was looking to undertake a rights issue at a 99% valuation cut. Subsequently, investors organised an extraordinary general meeting (EGM) in a bid to remove CEO Byju Ravendran and his family from leadership at the company.

The edtech giant’s net loss widened by 81% to INR 8,245.2 Cr in FY22 from INR 4,564.3 Cr in FY21. Operating revenue rose over 120% year-on-year to INR 5,014.6 Cr during the year under review.

The post BYJU’S Seeks More Time From NCLT To Decide On Pledging Or Selling Assets appeared first on Inc42 Media.

The Karnataka High Court (HC) has reportedly set aside the National Company Law Tribunal’s (NCLT’s) interim order, passed right month, restraining embattled BYJU’S from undertaking a second rights issue.

Hearing BYJU’S petition against the NCLT’s order, Karnataka HC’s Justice SR Krishna Kumar sent the matter back to the Tribunal for a fresh consideration, Bar and Bench reported.

BYJU’S declined to comment on the development.

The HC order will come as a relief for the cash-starved edtech startup. Last month, hearing a petition filed by investors General Atlantic Singapore and Sofina S.A., the NCLT asked the Byju Raveendran-led company to maintain the status quo with regard to existing shareholders and their shareholding. 

It asked BYJU’S to not proceed with the second rights issue till the petition against the first rights issue was disposed of.

The petitioners argued that BYJU’S proposed a second rights issue by way of an offer letter dated May 11, which opened on May 13 and is scheduled to end on June 13. 

Meanwhile, sources at BYJU’S then told Inc42 that there was no second rights issue and the rights issue being referred to by the investors was an extension of its previous $200 Mn rights issue.

They said that while BYJU’S received commitments worth over $200 Mn for the rights issue, it was able to close it partially as some of the commitments didn’t translate to fund infusion. As a result, the company floated the new offer. 

Following the Tribunal’s stay, BYJU’S moved the Karnataka HC against the NCLT order. The next NCLT hearing in the matter is scheduled for July 4.

Behind the courtroom drama is BYJU’S contentious rights issue. It is pertinent to note that the proceeds raised by BYJU’S from its first rights issue are also held in a separate escrow account, as per the NCLT’s order. 

BYJU’S, once the poster child of the edtech ecosystem, is currently in the news for all the wrong reasons. From multiple insolvency cases, allegations of hiding funds, and rising losses to a severe cash crunch, fight with investors, and layoffs – the startup is dousing fires on multiple fronts.

The post Karnataka HC Sets Aside NCLT’s Stay On BYJU’S Second Rights Issue appeared first on Inc42 Media.

Gaurav Munjal-led edtech startup Unacademy undertook another restructuring exercise last month, which resulted in 250 employees losing their jobs, sources told Inc42.

While 150 employees were from the sales department, who were fired for not being able to meet their “sales targets”, the remaining 100 employees were from various other departments, the sources said.

A spokesperson of Unacademy confirmed the development with Inc42 but didn’t disclose the number of employees impacted by the layoff round. 

“As part of our ongoing efforts to streamline operations and enhance business efficiency, we have recently undergone a restructuring exercise. This was necessary keeping in mind the company’s goals and vision for the year, as we focus all our efforts on sustainable growth and profitability. Consequently, some roles have been impacted. While this transition won’t be easy, we will be supporting all impacted individuals during this transition,” the spokesperson said.

Financial Express was the first to report the development. As per the report, around 600 employees were impacted by the restructuring exercise. 

It is pertinent to note that the latest restructuring exercise was an addition to the growing number of layoff rounds undertaken by Unacademy over the last couple of years. As per Inc42’s layoff tracker, Unacademy has laid off around 2,000 employees since the onset of the funding winter. 

In May this year, Inc42 exclusively reported that the startup’s medical entrance test preparation platform PrepLadder undertook a layoff exercise amid a shift in its sales strategy. Sources told Inc42 then that the NEET preparation platform laid off around 145 employees, which was almost 25% of its workforce. It was PrepLadder’s third round of layoffs in the past three years. 

Unacademy has been looking to raise funds for over a year now but hasn’t been successful so far. Recently, one of Unacademy’s cofounders, Hemesh Singh, stepped down from his executive role and moved to an advisory role. 

Singh, along with Munjal and Roman Saini, founded Unacademy in 2015. The Bengaluru-based startup claims to have a network of 91K registered educators (teachers) and over 99 Mn learners.

Sumit Jain, a partner at Unacademy, is reportedly going to replace Singh on the startup’s board seat.

Last month, Inc42 learnt that K-12 Techno Services held talks to acquire Unacademy. However, the talks are at initial stages.

Peak XV Partners-backed Unacademy narrowed its consolidated net loss by almost 40% to INR 1,678.1 Cr in the financial year 2022-23 (FY23) from INR 2,847.9 Cr in the previous year, on the back of a sharp reduction in costs.

Unacademy Group has raised about $800 Mn in funding till date. Last valued at $3 Bn, the startup counts Tiger Global, Elevation Capital, General Atlantic, and Meta among its backers.

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