The founder and CEO of the financially challenged BYJU’s, Byju Raveendran, has reportedly stated that thousands of staff members will probably be forced to resign as a result of the firm being placed in insolvency.
In a 452-page document submitted to the Karnataka High Court (HC), which Reuters was able to view, Raveendran stated that the action would also cause the operations of the software startup to be “completely shut down.
The petition to stop the insolvency process was submitted by his attorney, MZM Legal. It is also claimed that the plea explains the potential effects on the company’s business that the insolvency procedure may have.
The High Court has scheduled the matter for a hearing on Monday, July 22.
In the plea, Raveendran stated that it is probable that suppliers that “provide critical services” for the maintenance of the startup’s web platforms will declare default as a result of the proceedings. He continued by saying that this might result in a “complete shutdown of services” and a “grinding halt” to the tech’s operations.
Insisting that if the insolvency process proceeds, the tech personnel “may suffer… and may be forced to leave the organization,” Raveendran said he is prepared to settle the outstanding debts to the Board for Control of Cricket in India (BCCI) within the next ninety days.
The National Company Law Tribunal (NCLT) accepted the BCCI’s request to start the corporate insolvency resolution procedure (CIRP) against the tech startup, and the appeal before the HC was filed a few days later. Due to a jersey sponsorship agreement involving the Indian cricket team, BYJU’s Datalabs_in-article-icon owes the cricket organization INR 158.9 crore.
Pankaj Srivastava was appointed as the interim resolution professional (IRP) by the NCLT, which also gave him instructions to publish a notice inviting claims from all creditors. Additionally, the NCLT requested that the US-based lenders of the corporation present their claims to the IRP.
Accordingly, until the founder prevails in the appeal, Srivastava has assumed command of the tech venture, and Raveendran has been forced out.
At the moment, BYJU is attempting to put out fires on several fronts, including an impending financial crisis, a dispute with investors in the public eye, a cash constraint, growing losses, widespread layoffs, and salary delays.