Byju's Faces Potential Shutdown Amid Insolvency Proceedings: CEO Byju Raveendran Warns

Byju's, the renowned ed-tech company once valued at $22 billion, is on the brink of a total shutdown due to ongoing insolvency proceedings, according to its CEO, Byju Raveendran. The crisis threatens to force thousands of employees to quit and halt the company's operations completely.

Insolvency Proceedings and Their Impact

The National Company Law Tribunal (NCLT) initiated insolvency proceedings following a complaint by the Board of Control for Cricket in India (BCCI) over an outstanding payment of $19 million related to a sponsorship deal. This has exacerbated the company's challenges, including significant job cuts, a steep decline in valuation, and accusations of corporate governance lapses from investors like Prosus and General Atlantic.

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Potential Consequences

Byju Raveendran warned that the insolvency process could cause vendors who provide essential services to declare a default. This default could lead to a total shutdown of Byju's online platforms, bringing the company's operations to a grinding halt. In a court appeal, Raveendran sought to quash the insolvency proceedings, highlighting the severe impact on the company's 27,000 employees, including 16,000 teachers.

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Byju's Operational Reach and Recent Challenges

Byju's operates in over 21 countries and gained significant traction during the COVID-19 pandemic by offering online courses. However, recent setbacks, including disputes with investors and a substantial drop in valuation, have compounded the company's troubles. Raveendran assured that Byju's is willing to settle the outstanding dues to the Indian cricket board within 90 days.Explore More

News Source:- hindustantimes.com