FILE PHOTO: FILE PHOTO: Byju's logo is seen in this illustration taken, June 22, 2023. REUTERS/Dado Ruvic/Illustration//File Photo/File Photo
NEW DELHI (Reuters) -India's top court on Wednesday revived insolvency proceedings against education technology company Byju's following a lawsuit by a trust representing U.S. lenders who say they are owed $1 billion by the company.
The Supreme Court order is a setback for founder Byju Raveendran whose eponymous online coaching company was valued at $22 billion in 2022 before suffering setbacks including boardroom exits, an auditor resignation, and a public spat with foreign investors over alleged mismanagement. The company has denied any wrongdoing.
Byju's was undergoing insolvency proceedings following a complaint by India's cricket body which said it was not paid sponsorship dues. But the two sides settled the matter and a tribunal quashed the process, prompting U.S. lenders represented by Glas Trust to approach the Supreme Court.
"We are staying the (appeals tribunal) judgment," Chief Justice of India DY Chandrachud said in court, setting the next date of hearing as Aug. 23.
Byju's did not immediately respond to a request to comment on the court order.
During the court hearing, both the Indian cricket board and Byju's lawyers opposed the request from Glas Trust.
Byju's lawyer, Abhishek Manu Singhvi, raised concerns in court that putting on hold the tribunal's decision would revive the entire insolvency proceedings.
Just this month, Byju's had agreed to pay $19 million in dues to the cricket board to settle their dispute and get insolvency quashed, but Wednesday's ruling is set to complicate matters for the company.
Glas has argued Byju's used the money owed to lenders to clear the cricket board's dues.
Byju's, which operates in more than 21 countries, became popular during the COVID-19 pandemic by offering online education courses. It has around 27,000 employees, including 16,000 teachers.
It has warned that insolvency proceedings will likely force thousands of employees to quit and result in a total shutdown of its services.
(Reporting by Arpan Chaturvedi in New Delhi, Writing by Hritam Mukherjee in Bengaluru; Editing by Aditya Kalra, Muralikumar Anantharaman and Mark Potter)
