Jul 19, 2024 08:12 PM IST
Byju’s CEO warns of total shutdown as insolvency proceedings may force thousands of employees to quit
Insolvency proceedings against ed-tech company Byju’s will likely force thousands of employees to quit and result in a total shutdown of its services, its CEO said. Byju’s was once India’s biggest startup valued at $22 billion and is backed by investors like Prosus and General Atlantic. The company has suffered numerous setbacks in recent months, including job cuts, collapse in its valuation and a tussle with investors who have accused CEO Byju Raveendran of corporate governance lapses.
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Now the company is facing its biggest crisis after NCLT triggered insolvency proceedings following a complaint by BCCI over an outstanding payment of $19 million related to a sponsorship deal.
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The insolvency process may cause vendors who provide critical services to Byju’s for the upkeep of online platforms to declare a default, “leading to a total shut down of services” and bringing the operation to “a grinding halt,” Byju Raveendran said in a court appeal as he sought to quash the insolvency process.
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Byju’s operates in more than 21 countries and became popular during the Covid-19 pandemic by offering online courses. In the filing Byju Raveendran also said that the company’s employees “shall suffer … and may be forced to leave the organization.” He also said that the company was willing to pay the outstanding dues to the Indian cricket board within 90 days. Byju’s has around 27,000 employees, including 16,000 teachers.
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