Byju Raveendran: Byju Raveendran challenges NCLT ruling on creditor panel reconstitution, RP appointment

Byju Raveendran, founder and CEO of Byju’s, has challenged the National Company Law Tribunal’s January ruling, which inducted the creditors of the edtech firm, Glas Trust and Aditya Birla Finance, onto the committee of creditors (CoC) by setting aside the reconstitution of a panel carried out by the IRP, Pankaj Srivastava, on August 31. Raveendran has challenged the ruling, arguing that it is fundamentally flawed.

Senior advocate S. Guru Krishna Kumar, representing Raveendran, argued that the tribunal, which found lapses in Srivastava’s conduct, selectively chose to accept the constitution of the CoC as of August 21 while disregarding all subsequent developments.

Glas Trust and Aditya Birla Finance were initially included in the CoC for Think & Learn, formed on August 21, but were later removed when Srivastava reconstituted the committee, stating that it had been provisionally formed.

“Some kind of line is drawn by the adjudicating authority, as if to say that whatever he did on August 21 is accepted, but everything else is disregarded,” he said before the National Company Law Appellate Tribunal (NCLAT) on Monday.

Earlier the NCLT strongly criticised Srivastava, stating that he tried to mislead the tribunal and had directed the CoC to submit its recommendation on the appointment of a new resolution professional (RP).

Shailendra Ajmera from EY has now taken over as the new RP for Byju’s parent Think & Learn. This came after the CoC passed a resolution to replace Srivastava and appoint Ajmera as the new RP.

“The issue that the tribunal has framed for itself is this: did the RP have the power to reconstitute the CoC without the approval of the authority? But the real question the tribunal should have asked is whether there was a valid constitution of the CoC on August 21… Unfortunately, the tribunal proceeded on the basis that the constitution on August 21 was the constitution under the regulations,” he argued.Kumar also raised concerns about the grounds on which Aditya Birla was reclassified from an operational creditor to a financial creditor. The CoC now constitutes Glas Trust, Aditya Birla Finance, Incred Financial Services and ICICI Bank as financial creditors.

“The order is vitiated for not hearing the suspended directors at all. In fact, applications were filed for impleading, which are still pending before the NCLT,” Kumar added.

Raveendran has also objected to the appointment of the new RP. Earlier he had urged the authorities to launch a “thorough investigation” into alleged collusion and fraud by Glas Trust, consultancy firm EY and Srivastava.

“The entire CIRP process is truly vitiated by fraud. EY, who were brought in as IRP facilitators, purported to declare that they were independent and disinterested. But then it turns out, from the material which has now come on record, that they were completely involved in the entire exercise,” Kumar added