BENGALURU, INDIA – Educational technology company Byju’s has reached an agreement to resolve its dispute with French business services provider Teleperformance, which involved potential insolvency proceedings.
India’s National Company Law Tribunal (NCLT) was informed of the settlement on June 26, leading to the withdrawal of Teleperformance’s insolvency petition.
Origins of the payment dispute
The dispute arose from a business agreement where Teleperformance provided business processing outsourcing services, including call center operations, to Byju’s.
The petition claimed Byju’s stopped making payments starting April 14th, 2023. This resulted in an unpaid amount of ₹5.03 crore (roughly $602,000), which included the 18% annual interest both parties had previously agreed upon.
Byju’s agreed to a structured payment plan to resolve the issue:
– Initial payment: ₹1.5 crore ($179,000)
– Second payment: ₹2 crore ($239,000)
– Final payment: ₹2.2 crore ($263,000)
Ongoing legal issues
While this settlement brings some relief, Byju’s continues to face multiple insolvency proceedings from other creditors.
The company is entangled in disputes totaling over $1.5 billion, with claims from the Board of Control for Cricket in India (BCCI), Glas Trust, Enforcement Directorate (ED), Surfer Technologies, Fab Hotels, and various investor groups and agencies.
Byju’s has also been accused of using predatory tactics and misleading marketing practices. Reports indicate that the company marketed consumer loans as part of its educational courses, bundled with Chinese tablets.
Byju’s has also faced criticism for silencing critics on social media by invoking copyright violations, leading to the removal of numerous posts and videos.
Financial struggles and rights issue halt
Byju’s financial troubles have been exacerbated by its inability to access funds raised through rights issues due to ongoing disputes with investors.
Byju’s recently went to court to challenge an NCLT order that restricts the firm from issuing shares and raising some much-needed funds.
“This Tribunal hereby restrains the Respondents (Byju’s) from going ahead with the present rights issue which is in progress, till the disposal of the main plea. The Respondents are further directed to keep the amounts collected so far since the opening of the second rights issue in relation to this offer in a separate account which should not be utilised till the disposal of the main petition,” the June 12 NCLT order read.
