New Delhi, Aug 1 (PTI) Byju’s promoters on Thursday told insolvency appellate tribunal NCLAT that the company has raised Rs 159 crore through sale of shares to settle cricket board BCCI’s dues, denying allegations of round-tripping.
The NCLAT (National Company Law Appellate Tribunal) said it will continue hearing the plea challenging the insolvency proceeding against Byju’s again on Friday and also directed the interim resolution professional (IRP) of Think and Learn Pvt Ltd, which owns Byju’s, not to constitute a Committee of Creditors (CoC) till August 2.
On Wednesday, the Chennai bench of the NCLAT deferred its decision on the settlement between Byju’s and BCCI after the company’s US-based creditor alleged ’round-tripping’ of the money by the edtech firm’s founder.
Meanwhile, lawyers appearing for Raveendran Byjus and other suspended promoters of the company on Thursday submitted an undertaking to the NCLAT informing the source of Rs 158.9 crore to be paid to the Board of Control for Cricket in India (BCCI).
Rejecting the allegations of ’round-tripping’, the now-suspended promoters told the tribunal that the amount which will be paid to BCCI has come from sale of shares of Think and Learn Pvt Ltd (TLPL) earlier this year and a proper tax has also been paid on that.
The promoters’ counsel also told the tribunal that if the insolvency process is initiated, the company would be shut.
“The arguments are still going on but the court time is over. List this again tomorrow in the post-lunch session. Till tomorrow the CoC shall not be constituted,” said the two-member NCLAT bench.
The appellate tribunal also asked the promoters to finish their arguments by tomorrow, after which it will pronounce its order.
During the proceedings, an affidavit was filed by one Mr Hari on behalf of Riju Raveendran, brother of Byju’s founder Byju Raveendran and one of the largest shareholders of the company.
Riju is currently in London, the counsel informed.
The affidavit stated that on July 30 a settlement with BCCI has been reached for a payment of Rs 158 crore. Of this, Rs 50 crore has already been paid and Rs 25 crore is to be paid on August 2. For the rest of Rs 83 crore, which would be paid before August 9, a post-dated cheque from ICICI Bank would be handed over.
In the affidavit, which was read in the open court, Riju stated that no amount has been paid “in violation of any order” of any tribunal including the order passed by a Delaware (US)-based bankruptcy court.
“The funds part of the settlement amount is paid from his personal funds,” said Senior advocate Puneet Bali appearing for promoters.
The settlement amount raised by him comes from “sales and gains of income” from sales personally in TLPL in 2022.
“In this, he has accumulated Rs 3,600 crore. The Froms SH4 also evidence… out of this amount, approximately Rs 1,050 crore was paid as income tax,” he said, adding that the IT return filed during the recent period reflects these amounts.
The remaining amount of approximately Rs 2,600 crore was infused back to TLPL for its operation needs and to ensure that it continues as a going concern to pay salaries to its 27,000 employees and sustains the platform.
“This money is from a personal account and has nothing to do with USD 530 million and absolutely clean money and tax-paid money,” he said.
Solicitor General of India Tushar Mehta — appearing for BCCI — said the intent of the Insolvency & Bankruptcy Code is to keep the stressed company going and not to wind up.
“Now with today’s affidavit it is clear that the money which is coming to us is money generated by him (Riju) in India, on which income tax has been paid and has disclosed the source also,” he said.
Mehta also added the US-based creditor may have separate demands and separate insolvency petition, to which he is not objecting.
The apprehension of money of US-based creditors used for this has been “belied” from this affidavit, said the Solicitor General of India.
During the course of the hearing, the NCLAT bench also observed: “Now you have filed the affidavit and supporting documents as from where the money has come and what is the nature of the money. So now the issue of round-tripping is over. They (US-based creditors) have not even argued it today,” the bench said.
On Wednesday NCLAT had directed Riju Raveendran to submit an undertaking that Rs 158 crore to be paid to BCCI is not tainted and not against the order passed by the US-based court.
The appellate tribunal’s direction came after the creditors of Byju’s US-based subsidiary had alleged that the fund was sourced through ’round-tripping’.
During the proceedings, Arun Kathpalia, appearing for the promoter, also added that the US-based creditor has no locus to this settlement. They are now arguing from another angle that is good money from a bad person.
“The money is coming into the coffers of the company and it is used to clear liabilities. All these statements about salaries etc. are being worked on. I can assure you that if CIRP continues then it will shut down and that would be a huge loss,” he said, adding, Byju’s is paying a salary totalling Rs 127 crore to its employees.
NCLAT was hearing a petition filed by Byju’s, challenging the initiation of insolvency proceedings against Think & Learn.
On July 16, the Bengaluru bench of National Company Law Tribunal (NCLT) directed initiation of Corporate Insolvency Resolution Proceedings (CIRP) against Byju’s, admitting the plea filed by BCCI.
BCCI had approached NCLT under the Insolvency and Bankruptcy Code (IBC) over a default of Rs 158.9 crore by Think & Learn — once India’s most valuable startup worth USD 22 billion.
NCLT has suspended the board of Think & Learn as per the provisions of the IBC and appointed an interim resolution professional (IRP) to take care of the debt-ridden firm. PTI KRH HVA
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