OPPO Launches Legal Battle Against Byju’s Amidst Financial Turmoil
Byju’s in Crisis: OPPO Files Insolvency Plea Amid Mounting Debts
2 May 2024
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Neelesh Bachani
Chinese electronics manufacturer OPPO has filed an insolvency plea against edtech giant Byju’s under Section 9 of the IBC, highlighting a trend among operational creditors aiming to recover dues from the struggling company.
Teleperformance Business Services, another operational creditor of Byju's, has informed the NCLT about ongoing settlement discussions with Byju’s. The NCLT has granted them an additional 15 days to finalize the settlement, indicating a potential resolution to their dispute.
Besides the legal battles, Byju’s is grappling with issues like the inability to access funds raised from a recent rights issue, executive departures, and poor performance in the January-March quarter. With outstanding debts exceeding $200 million in India and the US, Byju’s faces a challenging road ahead in resolving its financial woes.
OPPO Mobiles Pvt Ltd, a Chinese electronics manufacturer, has taken a significant step by filing an insolvency plea against edtech giant Byju’s. The move underscores a growing trend among operational creditors seeking to recover dues from the struggling company. Filed under Section 9 of the Insolvency and Bankruptcy Code (IBC), this plea aims to initiate a corporate insolvency resolution process against Byju’s, which has been grappling with mounting debts and operational challenges.
The amount owed by Byju’s to OPPO has not been disclosed, highlighting the opacity surrounding the company's financial obligations. Byju’s has been granted a two-week period to respond to the matter, with the National Company Law Tribunal (NCLT) set to convene on May 28th for further deliberations. Represented by Vruksha Law Chambers, OPPO joins a consortium of operational creditors, including prominent entities like the BCCI and Teleperformance Business Services, in pursuing legal recourse against Byju’s.
During the latest hearing, Teleperformance Business Services informed the bench about ongoing settlement discussions with Byju’s, signaling a potential resolution to their dispute. The NCLT has granted Teleperformance an additional 15 days to finalize the settlement, with a subsequent hearing scheduled for May 28th. However, if no agreement is reached, the tribunal will proceed to evaluate the matter based on its merits.
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Byju’s legal representation, MZM Legal, has echoed similar sentiments, requesting additional time to explore settlement options. The tribunal has acceded to this request, reflecting its willingness to facilitate constructive dialogue between the parties involved. These developments highlight the complexity of Byju’s financial predicament and the concerted efforts being made to address it through legal channels.
Amidst these legal challenges, Byju’s grapples with many issues, including its inability to access funds raised from a recent rights issue due to a court order. Moreover, the departure of key executives, such as Arjun Mohan, and a disappointing performance in the January-March quarter underscore the company's turbulent operational landscape. With outstanding debts exceeding $200 million in India and a substantial sum in the US, Byju’s faces a daunting road ahead as it navigates through its financial woes.
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