Notices Of Non-Payment Of Debts To Creditors Are Issued Byju’s NCLT; Details

Think and Learn Pvt Ltd, the parent business of Byju, is being sued by a number of creditors and is having financial difficulties. According to a Moneycontrol article, the National Company Law Tribunal (NCLT) sent notifications to Think and Learn on May 22 in three instances involving unpaid debts to operating creditors.

Publisher McGraw Hill, BPO service provider Cogent, and supplier AG Automation of automation control devices filed the three claims.

In the midst of a severe financial crisis, Byju’s is engaged in lawsuit with at least seven suppliers in NCLT.

Byju’s owes Cogent around Rs 6 crore and McGraw Hill Rs 1.43 crore. The creditors have one week to submit a rejoinder and Byju’s has two weeks to react, according to the NCLT.

The cases are up for hearing on July 3.

This occurs one day after Moneycontrol revealed that several workers have hired an attorney and are preparing to knock on NCLT’s doors to demand payment from Byju’s.

Byju’s has not yet responded to these most recent tidings.

Byju Raveendran, the creator of Byju, has recently had no net worth, according to the Forbes Billionaire Index 2024. His net worth was $2.2 billion (around Rs 17,545 crore) at the end of the previous year.

Only four names from the previous year’s list were removed, according to Forbes. Among them was Byju Raveendran, a former edtech star whose company Byju’s was hit by many problems and had BlackRock reduce its value to $1 billion, a small portion of its $22 billion high valuation in 2022.

The rollercoaster ride at Byju’s

Byju’s, an edtech powerhouse founded in 2011, rose to popularity fast and, at its peak value of $22 billion in 2022, became the most valuable company in India.

The firm, which was the brainchild of Byju Raveendran, revolutionized the education industry with its cutting-edge learning software, catering to students ranging from those aspiring to be MBAs to basic school pupils. But the company’s finances have taken a serious hit as a result of escalating issues and recent financial disclosures.

Byju’s suffered a significant setback in April 2023 when the Enforcement Directorate, an anti-money laundering body, brought pressure to bear. The agency claims that some ‘incriminating’ documents and data were seized as a result of recent searches conducted by the ED.

After that, BlackRock reduced its value to around $8.4 billion in May 2023.

The difficulties increased when Byju’s long-overdue financial reports for the fiscal year that ended in March 2022 were revealed, revealing a significant net loss of more than $1 billion.

Later, in November 2023, Byju’s said that although revenue more than quadrupled, operational losses for its primary online education business were reduced by 6% in 2021–2022.

The Enforcement Directorate allegedly violated the Foreign Exchange Management Act (FEMA) to the tune of Rs 9,362.35 crore, and throughout the month, they issued Byju’s a show-cause notice.

After that, in November, Byju’s value was significantly reduced to less than $3 billion by tech investor Prosus NV, which was 86% less than its highest valuation of $22 billion in 2022. The company’s struggles with cash flow and governance resulted in a dramatic reduction in its value.

Ultimately, BlackRock reduced Byju’s value to $1 billion in January 2024, a 95% reduction. The media reported that Raveendran had promised his residences in exchange for money to pay employees, which coincided with the value reductions. Several Byju executives and board members had left the firm when it took longer than expected to file its financial statements for 2021–2022.