Byju’s faces insolvency after the Supreme Court stayed an order by the National Company Law Appellate Tribunal, approving the settlement between the company and BCCI, in effect reviving insolvency proceedings against the firm, sources said.The lenders sought the court’s intervention to replace Srivastava with Shailendra Ajmera as the IRP.
In their NCLT application filed on Aug 30, a copy of which has been reviewed by TOI, the lenders alleged that Srivastava failed to comply with the norms of the Insolvency and Bankruptcy Code 2016, which stipulate that the first meeting of the committee of creditors shall be held within seven days of the constitution of the CoC. In this case, the CoC was formed on Aug 21 but Srivastava, the lenders said, kept on postponing the committee’s first meeting scheduled for Aug 27 initially, and Sept 3 now. The lenders alleged that Srivastava has been in ‘breach of his statutory duties’. Ajmera, a partner with EY, has acted as the resolution professional for insolvent airline Go First.
“As the CoC was constituted on Aug 21, 2024, the deadline for the first CoC meeting was therefore Aug 22, 2024… it is submitted that the respondent’s (Srivastava) failure to convene the first CoC meeting completely contravenes the provisions of the code. Additionally, the respondent has failed to provide any valid or cogent explanations warranting the repeated postponement of the first CoC meeting,” the lenders said in their application. The application has been filed by Glas Trust Company, the administrative and collateral agent to the term loan lenders. The CoC comprises Glas Trust with a 99.4% voting share along with Aditya Birla Finance, Incred Financial Services and ICICI Bank as the other financial creditors.
The lenders said that Srivastava failed to convene the CoC despite numerous litigation proceedings.