Byjus clarifies source of BCCI settlement money to appeals court

Byjus clarifies source of BCCI settlement money to appeals court/Bloomberg

MINT | August 1, 2024 | 04:32 PM IST | Breaking News | Follow on Google News

Byjus clarifies source of BCCI settlement money to appeals court

Byjus clarifies source of BCCI settlement money to appeals court

Riju Raveendran, a Byju’s board member, informed a bankruptcy appeals court that he proposed to settle the edtech company’s dues to India’s cricket board from his personal funds.

He said he had accumulated ₹3,600 crore by selling his shares in Byju’s parent company, Think and Learn Pvt. Ltd., to other investors between May 2015 and January 2022. 

The National Company Law Tribunal (NCLT) recently admitted an insolvency petition against Byju’s by the Board of Control for Cricket in India (BCCI) over dues amounting to ₹158 crore. 

The edtech company, to fend off the bankruptcy, approached the National Company Law Appellate Tribunal (NCLAT) and informed it earlier this week that Riju Raveendran, the younger brother of founder Byju Raveendran, would settle the dues.

Riju Raveendran stated that of the ₹3,600 crore, he had paid ₹1,050 crore as income tax. The remaining ₹2,600 crore, he said, had been infused in Think & Learn for operational needs, including to pay the salaries of its 27,000 employees.

A settlement schedule

The clarification on Thursday comes after US lender Glass Trust Inc. opposed the settlement, questioning the source of the funds.

Glass Trust too has filed an insolvency application against Byju’s over claims on a guarantee worth ₹8,000 crore disbursed to the edtech firm’s US subsidiary.

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

The counsel for Riju Raveendran, Puneet Bali, submitted that the Byju’s board member would discharge the entire settlement amount of ₹158 crore, and that ₹50 crore had been paid already. 

Another ₹25 crore and the ₹83 crore would be paid on 2 August and 9 August, respectively, he informed the court.

“Now to secure the balance we propose to hand over a post-dated cheque drawn in ICICI Bank in favour of BCCI. We would be bound by the undertaking and in event of any default we will be binding by the NCLT’s 16 July order. The NCLT ordered initiation of insolvency proceedings against Byju’s. We are giving unconditional undertaking in this regard,” Bali said.

Riju Raveendran confirmed that no part of the settlement amount was in violation of any order, including that of the Delware court in the US. He stated that he had not received $533 million that is a subject matter before the Delaware court. 

To clarify the source of funds, Riju Raveendran said that as per the credit agreement of 24 November 2021, Glas Trust had disbursed $1.2 billion to Byjus Alpha, a step-down subsidiary of Think and Learn.

Under the credit agreement the money disbursed by the lender could not be brought to India. Therefore, none of the $533 million has been brought to India, he said.

‘Absolutely clean money’

“Riju has not directly or indirectly in any form or manner received money from disbursal of the lenders money. In fact, since the exhibition of the credit agreement there have been only two secondary sale of his shareholding in Think & Learn PVt Ltd in January and November in 2022 totalling to $109 million,” Bali told the court.

The counsel added that Riju Raveendran had not transferred or extended any security of his assets towards the payment of the settlement to BCCI. 

“From liquidation of the personal assets of Riju in India the settlement has been paid. This is all tax-paid money. This is from my personal account and has nothing to do with $533 million, which is absolutely clean and tax-paid money,” Bali said.

Byju Raveendran had challenged the NCLT order while also seeking a stay on the formation of the Committee of Creditors. The matter is being argued before a Chennai bench of NCLAT.

MINT