In a recent development in the corporate legal landscape, mobile phone manufacturer Oppo has approached the National Company Law Tribunal (NCLT) in Bengaluru, claiming that edtech company Byju’s owes them Rs 13 crore. This debt is said to be for the services involving the preinstallation of Byju’s educational apps on Oppo smartphones, aimed at expanding Byju’s user base.
During the proceedings on June 27, the NCLT decided to adjourn the matter to July 3, which it humorously dubbed “Byju’s day” due to nearly ten related petitions scheduled for that date. This move highlights the growing legal complexities surrounding Byju’s financial dealings.
Oppo’s legal team has expressed urgency in resolving this matter, citing concerns over the whereabouts of Byju’s promoters, who they claimed were “absconding” and no longer residing in India. This statement led to an objection from senior advocate Pramod Nair, representing Byju’s, who criticized the use of the term “absconding” and confirmed the adjournment of their cases to the collective hearing date.
The dispute stems from an agreement wherein Byju’s committed to paying Oppo for the app installations on its devices. Oppo now seeks to initiate an insolvency resolution process against Byju’s, arguing that the latter has acknowledged the debt, thereby simplifying the proceedings towards a resolution.
The legal troubles for Byju’s don’t end there. On the same day, another insolvency plea was filed by iEnergizer, maintaining the number of active insolvency petitions against Byju’s. Additionally, the tribunal has recently barred Byju’s from raising funds through a second rights issue, further complicating its financial strategies. Byju’s has challenged this prohibition in the Karnataka High Court, which has yet to issue a stay order.
Amidst this financial turmoil, the NCLT has imposed strict directives on Byju’s. It must maintain a status quo regarding its and their holdings and provide detailed records of all transactions and allotments related to its rights issue from earlier this year. This includes a complete disclosure of shareholder details, shares held, entitlements, and allotments up to and following an increase in authorized share capital.
As the legal and financial saga unfolds, the tech and education sectors are keenly watching the outcomes of these proceedings, which could have significant implications for corporate collaborations and financial compliance in India’s rapidly evolving digital education market.
