BYJU's Faces Rs 190 Cr Claims from Vendors at NCLT

The escalating claims against BYJU's and ongoing disputes with investors underscore the critical need for prompt resolution to mitigate financial risks and safeguard the company's long-term viability in the competitive edtech landscape.

Claim Overview:

• Vendors' claims against BYJU's at the National Company Law Tribunal (NCLT) have escalated to Rs 190 crore.

• Oppo, a handset maker, has lodged a fresh claim of Rs 1 crore, contributing to the mounting financial pressure on the edtech giant.

• BYJU's has been unable to access Rs 200 million funds raised through rights issues due to ongoing disputes with investors, exacerbating its financial challenges.

Specific Claims:

• The Indian Cricket Board (BCCI) has filed the largest claim of Rs 158.9 crore against BYJU's, indicating significant financial liabilities.

• Other claimants include Cogent E-Services for Rs 6.7 crore and Teleperformance Business Services for Rs 5 crore, among others.

• Despite the substantial figures, sources indicate that all claims are under dispute, suggesting potential discrepancies in the amounts owed.

Investor Disputes and Rights Issue:

• A group of investors, including Prosus, General Atlantic, Sofina, and Peak XV, alongside other shareholders like Tiger and Owl Ventures, have approached the NCLT regarding management issues and the contentious rights issue.

• BYJU's had concluded a rights issue worth Rs 200 million in February, albeit at a valuation 99% lower than its peak enterprise value of Rs 22 billion, raising concerns among investors.

• Despite majority approval from shareholders to increase authorized share capital to accommodate the raised funds, the company faces challenges in resolving investor disputes.

Upcoming Legal Proceedings:

• The next hearing at the NCLT Bengaluru concerning BYJU's is scheduled for June 6, indicating a prolonged legal battle over financial claims and investor disagreements.

• With unresolved disputes and escalating financial liabilities, the company's financial stability and operational continuity remain uncertain.

Absence of Responses:

• Queries directed to both BYJU's and Oppo regarding the claims and legal proceedings have reportedly gone unanswered, reflecting the sensitivity and complexity of the ongoing dispute.

Implications for BYJU's:

• The surge in claims against BYJU's, coupled with funding disputes and investor conflicts, poses significant challenges to the company's financial health and reputation.

• The inability to access raised funds further restricts BYJU's operational flexibility and strategic growth initiatives, potentially impacting its competitive position in the edtech market.

Need for Resolution:

• Amidst mounting financial pressures and legal complexities, swift resolution of disputes and amicable settlements with stakeholders are imperative for BYJU's to regain investor confidence and restore its financial stability.