Twist in Byju's tale: resolution professional change pushed to March amid objections

The Bengaluru insolvency court on Monday deferred until 19 March its decision to approve the appointment of Shailendra Ajmera as the new resolution professional (RP) to take charge of the embattled ed-tech firm Byju’s, replacing the current RP, Pankaj Shrivastava.

The National Company Law Tribunal (NCLT) was initially expected to pass the order appointing Ajmera as RP on Monday. However, it decided against doing so after counsels representing the former directors—Byju Raveendran and Riju Raveendran—objected, arguing that they needed to be heard before the tribunal could pass any order.

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Byju’s Committee of Creditors (CoC), which consists of dissenting lenders such as GLAS Trust LLC and Aditya Birla Finance, had on 17 February proposed the appointment of Shailendra Ajmera—a partner at Ernst & Young (EY) and the former RP for bankrupt airline Go First—as the new insolvency expert to manage Byju’s affairs.

This proposal follows a January NCLT order questioning Shrivastava’s ability to oversee the process. The tribunal on 29 January also cancelled the CoC reconstitution carried out on 31 August 2024, reinstating the previous CoC formed on 21 August 2024.

Ajmera's challenge

If Ajmera’s appointment is ratified by the court in March, he would step into a challenging role. His most recent stint as RP for Go First ended in controversy, with the airline ordered into liquidation after failing to secure a revival plan. Lessors of the airline filed a contempt case against him, alleging mismanagement of grounded planes and asset deterioration.

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Beyond Go First, Ajmera has handled insolvency proceedings for Ruchi Soya, Coffee Day Global, Rolta India, and the Supertech Orb Project.

At Byju’s, he would need to steer the company through its bankruptcy, mediating between lenders and former directors while working within court-mandated timelines.

The background

The company’s bankruptcy proceedings stem from a default on 16 June 2024, on a ₹158 crore payment to the Board of Control for Cricket in India (BCCI) for the firm’s sponsorship of the Indian cricket team jersey.

Byju Raveendran had challenged the insolvency proceedings before the National Company Law Appellate Tribunal (NCLAT). On 2 August 2024, the NCLAT dismissed the insolvency proceedings against Byju’s and approved the settlement with the BCCI after Riju Raveendran raised the ₹158 crore to repay the cricket board, temporarily restoring his control over the company’s operations.

However, Glas Trust challenged the NCLAT’s order in the Supreme court, upon which the apex court quashed the settlement process of NCLAT on 23 October 2024. The court found that the settlement did not follow the due process under the IBC (Insolvency and Bankruptcy Code) and instructed the parties to approach the NCLT for fresh proceedings.

On 10 February, the NCLT directed BCCI to submit the settlement plea to the CoC for approval. However, lenders, particularly GLAS Trust, have opposed the deal, calling the ₹158 crore “tainted money” and demanding that creditor dues take priority.

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Meanwhile, Byju’s former director Riju Raveendran again approached the NCLAT against the NCLT order to submit the settlement plea, on the basis that the ₹158 crore settlement with BCCI was finalized before the CoC was formed, meaning creditors should not have a say in the matter.

The NCLAT is scheduled to hear the issue on 3 March. If the NCLAT rules that the BCCI settlement predates the CoC’s formation, Byju’s could exit insolvency, restoring control to Byju Raveendran. If not, CoC approval would be required, giving lenders the upper hand in Byju’s fate.

Once India’s most valuable ed-tech startup, Byju’s, founded in 2011, pursued aggressive acquisitions but soon ran into financial trouble, regulatory scrutiny, and disputes with creditors.

Founder Byju Raveendran currently resides in Dubai, while Riju is based in London.