In a significant legal development, the Supreme Court has reinstated insolvency proceedings against BYJU's, reversing a previous tribunal's decision and marking a victory for US lenders who claim the education technology company owes them $1 billion.
This ruling is a considerable setback for Byju Raveendran, the founder of the once-highly valued startup, which was estimated to be worth $22 billion at its peak.
The revival of insolvency proceedings comes after BYJU's had previously settled a dispute with India's cricket control body over unpaid sponsorship dues, leading to a halt in the insolvency case by an appeals tribunal. However, the Supreme Court's decision now means control of the company will return to a court-appointed insolvency administrator.
The case reached the Supreme Court after Glas Trust, a US-based entity representing some of BYJU's group company lenders, appealed the earlier tribunal's decision to dismiss the insolvency proceedings. The Supreme Court's order to stay the previous ruling has reignited the insolvency process, putting the company's future back in the balance.
BYJU's has yet to comment on the Supreme Court's order. This legal battle adds another challenge for the ed-tech giant, which has been facing mounting financial and operational difficulties in recent months.