India's highest court on Wednesday reinstated bankruptcy proceedings against the education technology firm Byju's, following a legal action by a trust representing US lenders who claim the company owes them $1 billion. This decision is a blow to Byju Raveendran, whose online tutoring company, valued at $22 billion in 2022, faced challenges including boardroom departures, an auditor's resignation, and a dispute with foreign investors over alleged mismanagement. Byju's has refuted any misconduct.
Previously, Byju's was in bankruptcy proceedings due to a complaint from India's cricket authority regarding unpaid sponsorship fees. However, the issue was resolved between the parties, and a tribunal halted the process, leading Glas Trust, representing US lenders, to appeal to the Supreme Court. "We are suspending the (appeals tribunal) judgment," Chief Justice DY Chandrachud stated in court, scheduling the next hearing for August 23. Byju's did not promptly respond to a request for comment on the court's decision.
During the court session, lawyers for both the Indian cricket board and Byju's opposed Glas Trust's request. Byju's attorney, Abhishek Manu Singhvi, expressed concerns in court that pausing the tribunal's decision could reactivate the entire bankruptcy proceedings. Just recently, Byju's had agreed to pay $19 million to the cricket board to settle their dispute and end bankruptcy, but Wednesday's ruling is expected to complicate the situation for the company.
Glas has claimed that Byju's used the funds owed to lenders to settle the cricket board's dues. Operating in over 21 countries, Byju's gained popularity during the COVID-19 pandemic by providing online educational courses. It employs around 27,000 people, including 16,000 teachers. The company has cautioned that bankruptcy proceedings could likely lead to thousands of employees losing their jobs and the complete cessation of its services.
