Riju Raveendran has raised ₹158 crore to repay BCCI, Byju’s tells appeals tribunal

Mumbai: Byju’s has told the National Company Law Appellate Tribunal (NCLAT) that Riju Raveendran, younger brother of the edtech company's founder Byju Raveendran, has raised ₹158 crore to pay the Board of Control for Cricket in India (BCCI), one of the company’s operational creditors.

On Wednesday, Byju's counsel Arun Kathpalia told the appeals forum that the company paid the BCCI ₹50 crore on 30 July, and that the second and third tranches would be paid on 2 August and 9 August. This follows an appeal by Byju Raveendran, challenging insolvency proceedings ordered by the NCLT.

However, US lender Glass Trust Inc opposed the settlement, saying its claim was on a guarantee worth ₹8,000 crore. The money, which was disbursed to Byju’s US subsidiary, “has disappeared”, said senior lawyer Mukul Rohatgi, appearing for Glass Trust Inc.

Also read: Now, Qatar wealth fund goes after Byju Raveendran's personal assets

Citing a Delaware court judgement, Rohatgi said Byju Raveendran and his edtech firm have diverted more than $500 million. “We want to know if Byju’s coaching centres are closed... [if] they are unable to pay the staff then where is this money coming from? The money should come to us,” he added. Under the Insolvency and Bankruptcy Code (IBC), financial creditors must be repaid before operational creditors.

Creditors at odds

Tushar Mehta, representing the BCCI, argued that the cricket board's claim of ₹158 crore was relatively small and that Glass Trust should independently seek an order in the matter. “Let [Glass Trust] not come in way of our two parties settling the issue," Mehta said, adding that the settlement would not be paid by Byju Raveendran or his company.

Kathpalia, Ranveendran's counsel, clarified that the amount owed to the BCCI would be paid by Riju Raveendran as he had raised those funds independently, without having access to the company's money. 

“He is the largest shareholder of the company… There is no order which prevents him from making this payment, therefore no one is being prejudiced,” Kathpalia said. Contesting the allegations by Glass Trust, he said creditors could only object if the money was coming from the corporate debtor's account (in this case, Byju's).

One of the main reasons Byju Raveendran filed the appeal was to try and halt the formation of a committee of creditors, as this would make it harder for the company to exit bankruptcy. The counsel for the proposed CoC has given the NCLAT an oral undertaking that no such committee with be formed until the matter is disposed of on Thursday.

In November 2021, Byju's had raised $1.2 billion from a consortium of lenders in the US but began defaulting on payments in June 2022. The amount was raised specifically for its US expansion and could not be transferred to India under the terms of the agreement.

Also read | Bankrupt Byju’s: Is the edtech crisis deepening?

The lenders have since sued the company to recover their money. Last year, they took control of Byju's US subsidiary Alpha, which held the bulk of the money. However, days before a trustee appointed by the lenders was set to take control of the subsidiary, Byju's syphoned out more than $500 million, the lenders said.

Employees rush to file claims

On Monday, Mint reported that current and former employees of Byju’s, once India’s most valuable startup, were racing against time to claim unpaid salaries and other dues after the edtech company was admitted to insolvency earlier this month.

With a deadline of 31 July for filing such claims, Byju’s employees have appointed legal professionals and law firms to recover their salaries and benefits.

Also read | Mint Explainer: NCLT admits insolvency plea against Byju’s. Here’s what it means for the edtech platform

Mint accessed a group of more than 800 Byju’s employees seeking to recover their compensation from the edtech company.

About 60 employees from this group were in the final stages of filing their claims with the help of Bengaluru-brd law firm Canvas Legal, the report noted. Led by Rajat Singh, a former Byju’s tutor, they had filed a demand notice with NCLT on 4 July. However, the case was put on hold along with other pending lawsuits before Byju’s was admitted to insolvency.