Edtech firm Byju's founder on Monday challenged the National Company Law Tribunal’s January order to induct Glas Trust and Aditya Birla Finance onto the committee of creditors (CoC) of its parent company and set aside the reconstitution of the panel carried out by its then interim resolution personnel Pankaj Srivastava on August 31.
Byju Raveendran termed the NCLT ruling “fundamentally flawed” in his petition before the National Company Law Appellate Tribunal (NCLAT).
Arguing on his behalf, senior advocate S Guru Krishna Kumar said the tribunal, which found lapses in Srivastava's conduct, selectively chose to accept the CoC constituted on August 21 while disregarding all subsequent developments.
Glas Trust, which represents Byju’s US lenders, and Aditya Birla Finance were initially included in the CoC for Byju’s parent company, Think & Learn, formed on August 21. But they were removed when Srivastava reconstituted the committee, stating that it had earlier been provisionally formed.
“Some kind of line is drawn by the adjudicating authority, as if to say that whatever he did on August 21 is accepted, but everything else is disregarded,” the senior lawyer told the NCLAT.
The NCLT in its January order had criticised Srivastava, stating that he tried to mislead the tribunal, and it directed the CoC to submit its recommendation on the appointment of a new resolution professional (RP).
Shailendra Ajmera from EY has now taken over as the RP, with the new CoC passing a resolution in his favour.
“The issue that the tribunal has framed for itself is this: did the RP have the power to reconstitute the CoC without the approval of the authority? But the real question the tribunal should have asked is whether there was a valid constitution of the CoC on August 21. Unfortunately, the tribunal proceeded on the basis that the constitution on August 21 was the constitution under the regulations,” Raveendran’s lawyer argued.
Kumar also raised concerns about the grounds on which Aditya Birla Finance was reclassified from an operational creditor to a financial creditor. The CoC now constitutes Glas Trust, Aditya Birla Finance, Incred Financial Services and ICICI Bank as financial creditors.
“The order is vitiated for not hearing the suspended directors (of Think & Learn) at all. In fact, applications were filed for impleading, which are still pending before the NCLT,” Kumar added.
Raveendran also objected to the appointment of the new RP. Earlier he had urged the authorities to launch a “thorough investigation” into alleged collusion and fraud by Glas Trust, consultancy firm EY and Srivastava.
“The entire CIRP process is truly vitiated by fraud. EY, who were brought in as IRP facilitators, purported to declare that they were independent and disinterested. But then it turns out, from the material which has now come on record, that they were completely involved in the entire exercise,” Kumar said.
Byju Raveendran termed the NCLT ruling “fundamentally flawed” in his petition before the National Company Law Appellate Tribunal (NCLAT).
Arguing on his behalf, senior advocate S Guru Krishna Kumar said the tribunal, which found lapses in Srivastava's conduct, selectively chose to accept the CoC constituted on August 21 while disregarding all subsequent developments.
Glas Trust, which represents Byju’s US lenders, and Aditya Birla Finance were initially included in the CoC for Byju’s parent company, Think & Learn, formed on August 21. But they were removed when Srivastava reconstituted the committee, stating that it had earlier been provisionally formed.
“Some kind of line is drawn by the adjudicating authority, as if to say that whatever he did on August 21 is accepted, but everything else is disregarded,” the senior lawyer told the NCLAT.
The NCLT in its January order had criticised Srivastava, stating that he tried to mislead the tribunal, and it directed the CoC to submit its recommendation on the appointment of a new resolution professional (RP).
Shailendra Ajmera from EY has now taken over as the RP, with the new CoC passing a resolution in his favour.
“The issue that the tribunal has framed for itself is this: did the RP have the power to reconstitute the CoC without the approval of the authority? But the real question the tribunal should have asked is whether there was a valid constitution of the CoC on August 21. Unfortunately, the tribunal proceeded on the basis that the constitution on August 21 was the constitution under the regulations,” Raveendran’s lawyer argued.
Kumar also raised concerns about the grounds on which Aditya Birla Finance was reclassified from an operational creditor to a financial creditor. The CoC now constitutes Glas Trust, Aditya Birla Finance, Incred Financial Services and ICICI Bank as financial creditors.
“The order is vitiated for not hearing the suspended directors (of Think & Learn) at all. In fact, applications were filed for impleading, which are still pending before the NCLT,” Kumar added.
Raveendran also objected to the appointment of the new RP. Earlier he had urged the authorities to launch a “thorough investigation” into alleged collusion and fraud by Glas Trust, consultancy firm EY and Srivastava.
“The entire CIRP process is truly vitiated by fraud. EY, who were brought in as IRP facilitators, purported to declare that they were independent and disinterested. But then it turns out, from the material which has now come on record, that they were completely involved in the entire exercise,” Kumar said.
