BCCI and Byju’s Controversy –In a significant development, the Board of Control for Cricket in India (BCCI) has filed an insolvency petition against its former sponsor Byju’s, alleging a default in payment of INR 158 crore. The petition was filed with the National Company Law Tribunal (NCLT) in Bengaluru on November 28, 2023.
BCCI and Byju’s Controversy: BCCI claims that Byju’s is unable to complete their Contract
The BCCI claims that Byju’s has failed to honor its contractual obligations despite repeated reminders. The cricket board had entered into a five-year sponsorship deal with Byju’s in 2021, reportedly worth INR 500 crore. However, Byju’s terminated the deal in 2022, citing financial constraints.
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The BCCI has maintained that Byju’s owes INR 158 crore for the period during which the sponsorship was in effect. The cricket board has categorized Byju’s as an “operational creditor” under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016.
The NCLT has admitted the BCCI’s petition and has set December 22, 2023, as the date for hearing the matter. If the tribunal finds merit in the BCCI’s claims, it could initiate insolvency proceedings against Byju’s.
The development has sent shockwaves through the Indian edtech industry, which is already facing a funding crunch. Byju’s, once the poster child of India’s startup ecosystem, has been grappling with financial troubles in recent months. The company has laid off hundreds of employees and has scaled down its operations.
The BCCI’s move to initiate insolvency proceedings against Byju’s could have far-reaching implications for the edtech sector. It could further erode investor confidence and make it even more difficult for edtech companies to raise funds.
The outcome of BCCI-Byju’s case will be closely watched by the edtech industry and the broader startup ecosystem. The case could set a precedent for how insolvency proceedings are handled in the context of sponsorship deals.
BCCI and Byju’s Controversy: Key Points
- The BCCI claims Byju’s owes INR 158 crore for the period during which the sponsorship was in effect.
- The BCCI has categorized Byju’s as an “operational creditor” under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016.
- The NCLT has admitted the BCCI’s petition and has set December 22, 2023, as the date for hearing the matter.
- If the tribunal finds merit in the BCCI’s claims, it could initiate insolvency proceedings against Byju’s.
BCCI and Byju’s Controversy: Legal Battles and Industry Impact
Byju’s has also been embroiled in legal disputes with its former sponsor, the Board of Control for Cricket in India (BCCI). The BCCI has accused Byju’s of defaulting on payments worth INR 158 crore, leading to an ongoing insolvency proceeding.
Byju’s has indicated its willingness to settle the matter with the BCCI over unpaid sponsorship dues. The company has reportedly made an initial payment of ₹300 crore to the BCCI and is in discussions with the cricket board to reach a final settlement.
The BCCI is seeking ₹158 crore from Byju’s for the period during which the sponsorship deal was in effect. Byju’s claims that it has already paid the majority of the dues, but the BCCI disagrees.
The two parties are expected to continue negotiations in the coming weeks, and it is hoped that they will reach a mutually agreeable settlement.
The dispute between Byju’s and the BCCI has been closely watched by the Indian edtech industry and the broader startup ecosystem. The case has raised concerns about the financial stability of the edtech giant and the sustainability of its business model. It has also cast a shadow over the future of the sponsorship deal between Byju’s and the Indian cricket team.
The outcome of the dispute will be closely watched by industry observers and will have implications for the way sponsorship deals are structured and the way insolvency proceedings are handled in the context of such deals.
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