Insolvency proceedings against India's Byju's were quashed by an appeals tribunal on Friday in a big win for founder Byju Raveendran but a setback for U.S. lenders that say they are owed $1 billion by the education start-up.
Byju's was valued at $22 billion in 2022 before suffering setbacks including boardroom exits, an auditor resignation, and a public spat with foreign investors over alleged mismanagement. The company has denied any wrongdoing.
Byju's was facing insolvency proceedings after India's cricket board said it was not paid $19 million in sponsorship dues. Former billionaire CEO Byju Raveendran asked the insolvency to be quashed as his co-founder brother Riju Ravindran decided to pay the cricket board, settling the matter.
"The settlement between the parties is hereby approved and as a result thereof the appeal succeeds," the National Company Law Appeals Tribunal said on Friday.
U.S.-based Glas Trust, representing some U.S. lenders of a Byju's group company, had opposed the halt on Byju's insolvency process saying Raveendran and his brother used money owed to lenders to clear the cricket board's dues.
But Riju in a separate court filing dated Aug. 1 and seen by Reuters said he paid the cricket board's settlement amount from "personal funds" and the liquidation of personal assets.
Glas Trust can appeal Friday's order at India's Supreme Court. It did not respond to Reuters' request for comment on its plans. Raveendran and a spokesperson for Byju's did not respond to a request for comment.
Byju's, which operates in more than 21 countries, became popular during the COVID-19 pandemic by offering online education courses. It has around 27,000 employees, including 16,000 teachers.
