Byju’s settles insolvency case vs. Teleperformance
BENGALURU, INDIA — Indian education technology (Edtech) giant Byju’s has successfully settled its insolvency dispute with Teleperformance, a France-based customer support provider.
India’s National Company Law Tribunal (NCLT) was informed of the settlement on June 26, which resulted in the withdrawal of Teleperformance’s insolvency petition.
This development brings some relief to Byju’s amidst its ongoing financial and legal challenges.
Origins of the payment dispute
The dispute originated from a business agreement between Byju’s and Teleperformance, under which the latter provided business processing outsourcing services, including call center operations, to the edtech firm.
Byju’s began defaulting on payments from April 14, 2023, leading to a total outstanding amount of ₹5.03 crore (US$602,000), including an 18% annual interest agreed upon by both parties.
Byju’s acknowledged the default and agreed to a structured payment plan to settle the dues.
The plan included an initial payment of ₹1.5 crore (US$179,000), followed by subsequent payments of ₹2 crore (US$239,000) and ₹2.2 crore (US$263,000).
Despite the structured plan, the payments were delayed, prompting Teleperformance to file an insolvency petition under Section 9 of the Insolvency and Bankruptcy Code, 2016.
NCLT’s mediation and resolution
The NCLT, led by Justice Khetrabasi Biswal, had been urging both parties to reach an amicable settlement. The tribunal had granted multiple extensions to facilitate negotiations.
On June 26, Byju’s informed the NCLT that a settlement had been reached, and Teleperformance subsequently withdrew its insolvency petition.
Byju’s ongoing legal challenges
While the settlement with Teleperformance brings some respite, Byju’s continues to face multiple insolvency proceedings from other creditors.
The company is involved in nearly ten similar disputes, including significant claims from the Board of Control for Cricket in India (BCCI) amounting to ₹158.91 crore (US$12 million), and other creditors like Surfer Technologies, OPPO Mobiles India, Cogent E-services, McGraw Hill Education India, and iEnergizer.
Byju’s financial struggles and future outlook
Byju’s financial troubles have been compounded by its inability to access funds raised through rights issues due to ongoing disputes with investors.
The company recently challenged an NCLT order that halted its second rights issue, which was intended to raise much-needed capital.
The Karnataka High Court is expected to hear Byju’s plea regarding this matter soon.
