Byju's Vs BCCI case: NCLT likely to pronounce the order on March 20

The National Company Law Tribunal (NCLT) in Bengaluru is set to make a crucial decision next week regarding the insolvency plea filed by the Board of Control for Cricket in India (BCCI) against the once edtech giant BYJU’S. 

The legal battle, which has been unfolding since September last year, arises from BYJU’S alleged failure to clear dues amounting to approximately Rs 160 crore related to its jersey sponsorship deal with the Indian cricket team.

What did Byju's say?

During the proceedings, BYJU’S legal team argued for the matter to be moved to arbitration, contending that the BCCI’s claim does not qualify as an operational debt since no services were rendered post the contract’s expiration.

The company maintained that all dues for the contract period had been cleared, and the current dispute pertains to the period after the agreement ended. The NCLT is expected to conclude its hearing and possibly deliver a verdict on March 20, following the final arguments from both parties, as per media reports. 

The ongoing financial challenges for Byju's 

The conflict traces back to BYJU’S decision to exit its jersey sponsorship deal with the BCCI in December 2022 amidst a broader strategy to cut costs and ensure sustainability.

The company, once valued at over $22 billion, has significantly reduced its marketing and operational expenditures in response to financial pressures. This includes ending major branding partnerships and transitioning to a remote working model for the majority of its staff.

Investors' action on rights issue 

BYJU’S financial challenges are further complicated by a dispute with its investors over the validity of a recent rights issue offering. The hold has led to a delay in salary payments for a large portion of its workforce as the funds from rights issue are locked in an escrow account, temporarily restricting their use for business operations.

However, Byju's has partially paid the February salaries to its employees and assured its staff that the balance of their February salaries would be paid once the funds from the rights issue become accessible.