India’s Supreme Court on Wednesday revived insolvency proceedings against the embattled ed-tech giant Byju’s, following a petition by a trust representing U.S. lenders who claim the company owes them $1 billion.
The ruling marks a significant setback for Byju Raveendran, the founder of the online education platform, which was once valued at $22 billion in 2022.
The company has since faced multiple challenges, including high-profile resignations, an auditor’s exit, and public disputes with international investors over alleged financial mismanagement. Byju’s has consistently denied any wrongdoing.
The insolvency case had initially been triggered by a complaint from the Board of Control for Cricket in India (BCCI), which alleged non-payment of sponsorship dues by the ed-tech firm. The matter was settled between Byju’s and the BCCI, leading to the dismissal of the insolvency process by a tribunal.
However, the U.S. lenders, represented by Glas Trust, approached the Supreme Court to contest the tribunal’s decision.
“We are staying the tribunal’s judgment,” Chief Justice of India D.Y. Chandrachud stated during the court hearing, setting August 23 as the next date for proceedings.
Byju’s did not provide an immediate response to the court’s ruling.
During the hearing, both the BCCI and Byju’s legal representatives opposed Glas Trust’s petition. Byju’s counsel, Abhishek Manu Singhvi, expressed concerns that reinstating the insolvency proceedings would significantly impact the company.
Earlier this month, Byju’s had agreed to pay $19 million to the cricket board to settle the dispute and end the insolvency process. However, the Supreme Court’s decision on Wednesday is likely to complicate matters for the company, which operates in over 21 countries and employs approximately 27,000 people, including 16,000 teachers.
The ed-tech firm has warned that a continuation of the insolvency proceedings could lead to mass resignations and potentially result in the complete shutdown of its operations.
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