New Delhi: The dramatic decline of BYJU’S, once India’s most valuable EdTech startup, has raised serious concerns over corporate governance and financial manipulation. Byju’s founder Raveendran in a social media post has alleged that foreign creditors, along with certain Indian collaborators, orchestrated a plan to take control of the company.
Documents, purportedly leaked by the whistleblower, suggest that key decisions regarding BYJU’S insolvency process may have been pre-determined even before bankruptcy proceedings formally began. These allegations, if proven, could have significant implications for India’s startup ecosystem and corporate governance frameworks.
Claims of Pre-Determined Insolvency Process
According to Ravindran, GLAS Trust, representing foreign lenders, had allegedly selected EY’s Dinkar Venkatasubramanian months before the insolvency process began, raising concerns about the neutrality of the proceedings. It is claimed that within 48 hours of his appointment as Interim Resolution Professional (IRP) on July 16, 2024, Pankaj Srivastava transferred control of BYJU’S insolvency process to EY’s team, the same team allegedly pre-selected by creditors.
Official declarations by EY reportedly stated “NIL prior relationships” with BYJU’S and GLAS. However, social media posts and internal documents suggest that EY had previously worked with BYJU’S, raising questions about potential conflicts of interest.
Legal experts reviewing these claims have indicated that, if true, such actions could raise serious ethical and legal concerns regarding the conduct of the insolvency process. However, the matter remains under review, and no final conclusions have been drawn by the authorities.
Alleged Delays in Settlement Process
Another major claim is that BYJU’S had fully settled its dues to the BCCI on July 31, 2024, which, under normal procedures, should have led to the withdrawal of insolvency proceedings. However, the IRP allegedly delayed filing the required withdrawal documents, allowing time for the formation of a Committee of Creditors (CoC) and enabling foreign creditors to retain control of the company.
The whistleblower claims this delay was not accidental but an intentional act to continue the insolvency process despite the original debt being settled. However, no legal ruling has confirmed this allegation, and the matter is still under scrutiny.
Impact on Employees and Students
As the insolvency process unfolded, thousands of BYJU’S employees—including teachers—allegedly faced salary delays, despite claims that the company had sufficient funds. The whistleblower asserts that efforts were made to block salary payments through legal actions, exacerbating the financial distress of employees.
The National Company Law Tribunal (NCLT), in its January 29th order, took note of these concerns, stating that the IRP’s actions constituted “an act of misinformation and misleading this Tribunal.” The tribunal further noted that his conduct was “not fit and proper as expected from an officer of the Tribunal” and recommended disciplinary proceedings and an investigation. However, further legal proceedings are required to determine the full extent of responsibility and potential wrongdoing.
Broader Concerns for India’s Startup Ecosystem
Industry experts warn that if these allegations hold true, they could set a dangerous precedent for India’s startup ecosystem. Some investors and analysts argue that the case highlights potential loopholes in India’s insolvency laws that could be exploited by foreign creditors to take control of financially distressed companies.
A leading tech investor, speaking on condition of anonymity, stated: “If successful Indian startups can be systematically taken over through financial and legal maneuvers, it raises serious questions about India’s ability to protect its homegrown enterprises.”
Call for Investigation and Legal Clarity
With these allegations now in the public domain, there is a growing demand for a thorough investigation to determine:
✔️ Whether the insolvency process followed legal protocols
✔️ If there were any conflicts of interest in the appointment of key decision-makers
✔️ Whether any individuals deliberately misled the tribunal
✔️ If the insolvency process was weaponized for a hostile takeover
Legal experts stress that only a comprehensive judicial review can establish the truth behind these claims. The outcome of ongoing legal proceedings will determine whether corrective measures are needed to strengthen India’s corporate governance frameworks.
For Byju Raveendran, the founder who built BYJU’S into a global education brand, these revelations could offer vindication if they confirm that his company’s downfall was not solely due to business mismanagement but external financial pressures. However, until the courts deliver a final ruling, these remain allegations and not established facts.
Legal Disclaimer:
The above report is based on available documents, media reports, and whistleblower claims. The allegations mentioned are still under legal consideration, and no final judicial ruling has been made. It is advised to view this information in the context of ongoing legal proceedings.
