NCLT directs disciplinary proceedings against Byjus' resolution professional

The National Company Law Tribunal on Wednesday (January 29, 2025) ordered a disciplinary proceeding against Byjus' resolution professional and nixed his direction to exclude Glas Trust and Aditya Birla Finance from the edtech's Committee of Creditors.

Passing an order, the Bengaluru bench of the National Company Law Tribunal (NCLT) has directed the Insolvency & Bankruptcy Board of India (IBBI) to conduct an enquiry against Pankaj Srivastava, resolution professional of Think & Learn, which owns edtech firm Byju's.

A two-member bench in its order said his conduct "is not fit and proper as expected".

The conduct on the part of the IRP needs to be dealt with the way of disciplinary proceedings by the IBBI. Hence, the IBBI may conduct the necessary investigation in this matter, it said.

The tribunal also cancelled the reconstitution of the Committee of Creditors (COC) of Byju's, carried out by the Interim Resolution Professional on August 31, 2024, in which Srivastava had excluded Glas Trust and Aditya Birla Finance.

The NCLT has restored the previous CoC, constituted on August 21 last year, putting Aditya Birla Finance back as a financial creditor of Think & Learn.

It also set aside the resolution professional's direction, re-classifying Glas Trust and Aditya Birla Finance as operational creditors.

"The Applicant No. 1, Aditya Birla Finance Limited is hereby restored to the status of a Financial Creditor, with all attendant rights, privileges, and obligations, as envisaged under the Code and letter dated September 5, 2024, re-classifying Applicant No. 1 as Operational Creditor is set aside," the NCLT said.

Besides, the tribunal also set aside the resolution passed by the reconstituted CoC on September 3, 2024, which appointed the Interim Resolution Professional as the Resolution Professional.

"In addition, any subsequent resolutions, if passed by the reconstituted CoC, are also nullified," said the 27-page-long NCLT order.

Its direction came over pleas moved by Aditya Birla Finance and U.S.-based creditor Glas Trust Company LLC.

Earlier, the appellate tribunal NCLAT had stayed the insolvency proceedings against Byju’s after a settlement with the apex cricket body BCCI over dues.

However, it was challenged before the Supreme Court by Glas Trust and some others, which on October 23 set aside the NCLAT order, halting the insolvency proceedings initiated against Think & Learn.

The apex court sent the matter back to the NCLT, starting the insolvency again. Glas Trust and Aditya Birla Finance had approached the RP with their claims.

However, the RP recognised their claims as operational creditors and not as financial creditors and part of the CoC, which conducts the insolvency process under the supervision of the NCLT.

A financial creditor has voting rights, and claims are generally assured. However, an operational creditor has lesser power.