\Byju’s – BCCI : In a significant turn of events, the Board of Control for Cricket in India (BCCI) has received a major relief after the National Company Law Tribunal (NCLT) initiated insolvency proceedings against its former sponsor, Byju’s. The edtech giant, which once stood as India’s most valuable startup, has been struggling financially and failed to pay Rs 158.9 crore in sponsorship dues to the BCCI.
Let’s have a look into more details: Byju’s – BCCI
Byju’s Financial Woes and Sponsorship Agreement
Byju’s entered into a sponsorship agreement with the BCCI in July 2019, which allowed the company to display its brand logo on the Indian cricket team’s kit and benefit from various advertisement placements and ticket allocations. However, Byju’s financial troubles led to defaults on payments since June 2022. Despite acknowledging the dues, the company repeatedly requested extensions and failed to settle the outstanding amount.
NCLT’s Decisive Order
The Bengaluru bench of the NCLT has taken decisive action by freezing Byju’s assets and appointing Pankaj Srivastava as the interim resolution professional. This move effectively suspends Byju’s board of directors, including its founder and CEO, Byju Raveendran, who will now report to the resolution professional. The tribunal has also invited creditors, including the BCCI, to file claims against Byju’s.
Byju’s Response and Future Plans
Byju’s has expressed a desire to reach an amicable settlement with the BCCI, despite the ongoing insolvency proceedings. A spokesperson for the company stated their confidence in finding a resolution and mentioned plans to challenge the NCLT order in the appellate tribunal.
“We wish to reach an amicable settlement with BCCI and are confident that, despite this order, a settlement can be reached. Our lawyers are reviewing the order and will take necessary steps to protect the company’s interests,” said the Byju’s spokesperson.
Impact on BCCI and Future Sponsorships
The insolvency proceedings against Byju’s bring a significant relief to the BCCI, which was left in a lurch over the unpaid dues. However, the road to recovering the full amount remains uncertain. The ongoing legal battle and the financial state of Byju’s will determine the final outcome of this sponsorship dispute.
The situation also serves as a cautionary tale for BCCI and other sports organizations regarding sponsorship agreements with financially unstable companies. Ensuring due diligence and securing reliable bank guarantees may become a standard practice in future deals.
Byju’s Downfall
Byju’s rise and fall in the edtech sector have been dramatic. Once valued at USD 22 billion, the company’s fortunes dwindled with the reopening of schools post-pandemic, which severely impacted its core business. Financial mismanagement, missed reporting deadlines, and internal conflicts among investors and founders further exacerbated the situation. Job cuts and shrinking business operations have also contributed to its current financial instability.
The NCLT’s order not only addresses the specific dues owed to the BCCI but also reflects broader challenges within Byju’s operational and financial structure. The outcome of these proceedings will be closely watched by stakeholders in the education and sports sectors.
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FAQ
How much does Byju’s owe BCCI?
Byju’s owes BCCI Rs 158.9 crore for sponsorship fees
