In another trouble for embattled BYJU’S, the Board of Control for Cricket in India (BCCI) has dragged the edtech decacorn to the National Company Law Tribunal (NCLT).
As per the details available on the NCLT website, the case was filed in November this year.
The case likely pertains to the dispute around the sponsorship rights of the Indian cricket team’s jerseys, according to The Morning Context, which was the first to report the news.
The publication quoted a source as saying, “There is no way to be sure about the amount, but I hear it can vary between INR 100 Cr and INR 250 Cr.”
Meanwhile, a BYJU’S spokesperson told Inc42 that the company is in discussions with the cricket board and expects to settle the matter soon.
“We are in discussions with the BCCI to settle the matter and we hope to achieve that soon,” the spokesperson said, without giving any additional details about the case.
Troubles Continues Unabated At BYJU’S
While details are still scarce, the story traces its origins to 2019 when BYJU’S took over the sponsorship of the Indian cricket team from OPPO till the end of March 2022. This came after the smartphone brand handed over the remaining term of its sponsorship to the edtech giant after headlining the Indian team’s jersey for two-and-a-half years.
Subsequently, BYJU’s sought an extension of the sponsorship for an additional year till 2023-end, reportedly for a cumulative sum of $55 Mn.
However, BYJU’S unceremoniously exited its jersey sponsorship deal with the BCCI in December 2022 amid financial troubles as the funding winter began to hit the Indian startup ecosystem.
Over the course of the next few months, BYJU’S grabbed the limelight for all the wrong reasons. As funding taps ran dry and investors tightened their purse strings, the edtech company began a cost-cutting exercise. Overall, it has laid off over 5,000 employees till date since 2022 and about 4,000 more are expected to face the axe.
Meanwhile, losses also piled up as BYJU’S acquisitions hammered its financials. The startup recorded a nearly 20X year-on-year (YoY) surge in net loss to INR 4,588 Cr in the fiscal year 2020-21 (FY21), while revenue was almost flat at INR 2,280 Cr.
Meanwhile, the delay in releasing the financial statements for FY22 and FY23 resulted in heightened investor scrutiny. This delay also led to the departure of auditor Deloitte and, subsequently, three key board members.
Recently, BYJU’S released parts of its standalone FY22 results but failed to furnish audited financial statements for the period.
Alongside, there appears to be a looming debt crisis involving its lenders in connection with the $1.2 Bn Term Loan B (TLB). There have also been delays in vendor payments, provident fund payments for laid off employees, and outstanding transactions involving customer refunds.
Making matters worse seems to be the long line of top-level exits at the company, including those of group chief financial officer (CFO) and India CEO.
The company is also facing regulatory scrutiny for the delay in filing financial statements. Meanwhile, the Enforcement Directorate recently sent a show-cause notice to the company for allegedly flouting anti-money laundering norms.
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