Cricket News Desk.. Indian edtech giant Byju's has suffered a major setback. The National Company Law Tribunal (NCLT) has accepted the bankruptcy petition filed by the Board of Control for Cricket in India (BCCI). The cricket board claims that Byju's owes sponsorship money of Rs 158 crore. This marks the decline of a company that was once India's most valuable startup ($22 billion).
Management suspended and assets frozen
Byju's became popular for online education during the COVID-19 pandemic. It also offers offline coaching classes. Byju's operates in more than 21 countries. The tribunal has appointed an interim resolution professional to look after Byju's affairs until a committee of creditors is formed. This effectively suspends the current management and freezes the company's assets.
Is there any dispute between Byju's and BCCI?
The dispute between Byju's and BCCI over the jersey sponsorship deal arose in 2019. Although the payment was made till September 2022, the edtech company allegedly did not fulfill its obligations from October 2022 to March 2023. Byju's has expressed its desire to resolve the matter amicably with the BCCI and plans to challenge the NCLT decision in the High Court.
Investors have also suffered a setback
The decision is also a blow to investors, many of whom had disregarded their investments as the company would be acquired by a new entity. After the NCLT proceedings, Byju's will be managed by a committee of creditors, with no power for the management and shareholders. Byju's debtors will have to wait for a resolution to recover their dues.
