Byju’s Creditors to Decide on Resolution Professional: Who Benefits and How?

Byju’s is currently facing insolvency proceedings. The National Company Law Tribunal (NCLT) has ordered important changes in the process to ensure fairness and transparency. According to sources, Pankaj Shrivastava, Byju's interim resolution professional, called a meeting of the committee of creditors (CoC) on Saturday to cast votes for the permanent resolution professional. One of the sources further stated that Glas Trust Company, the administrative agent chosen by a group of Byju's lenders, will be present at the CoC meeting and will have 99.41% voting rights in compliance with a National Company Law Tribunal (NCLT) order. To understand this better let’s read further to understand what this means!

Byju’s: Meeting is being held to vote on appointing a RP

A meeting of the Committee of Creditors (CoC) is being held. The meeting is called to vote on appointing a permanent resolution professional (RP). It’s like an action for a new leadership decision. This elected person(RP) will take charge of Byju’s insolvency process. The new RP will manage all financial and legal matters. This will bring more transparency in the company. Glas Trust, which represents a group of lenders to Byju’s, will hold 99.41% of voting rights. This means Glas Trust will have the more power to decide who the new resolution professional will be. 

The previous interim resolution professional (IRP), Pankaj Shrivastava, faced disciplinary action by the NCLT. The action taken by NCLT was for misconduct and decisions that negatively affected the insolvency process. Though Pankaj felt that the decision to remove him was not fair. With a new resolution professional in place, the insolvency proceedings can move forward transparently and efficiently. Lenders like Glas Trust and Aditya Birla Finance will have a stronger role in decision-making. This can help recover their loans. A clear resolution process may improve Byju’s financial situation and offer a better chance for restructuring instead of liquidation.

Byju’s: Benefit of the changes by NCLT

The main people who will benefit from this decision are creditors (lenders). This is because they will have more control over how Byju’s repays its debts, making sure decisions are fair. Employees and stakeholders will also benefit since a well-planned process can help protect jobs and keep the company running smoothly. Byju’s has not been running any of its operations for some time now. Investors and customers will gain trust in Byju’s future. Once they know that the company is working on a plan to stay stable and continue its services without problems.

Byju’s: What made NCLT make this decision?

In January, the National Company Law Tribunal (NCLT) took action against the interim resolution professional (IRP) handling Byju’s insolvency case. The tribunal found that the IRP had acted unfairly. They made decisions that affected the case and its stakeholders. The tribunal also ruled that Glas Trust (a US-based company) and Aditya Birla Finance which were earlier removed from the Committee of Creditors (CoC) must be brought back.