Synopsis
The National Company Law Tribunal has directed disciplinary action against Byju's Resolution Professional, reinstating lenders Glas Trust and Aditya Birla Finance to the committee of creditors, after ruling that prior exclusions were unjustified.Key Takeaways
- NCLT orders disciplinary action against Pankaj Srivastava.
- Glas Trust and Aditya Birla Finance reinstated in CoC.
- IBBI to investigate actions of the RP.
- New CoC to appoint a new RP.
- Supreme Court permits continuance of insolvency process.
New Delhi, Jan 29 (NationPress) The National Company Law Tribunal (NCLT) on Wednesday mandated disciplinary proceedings against Byju's Resolution Professional (RP) Pankaj Srivastava, while reinstating the troubled edtech company's lenders Glas Trust LLC and Aditya Birla Finance Ltd into the committee of creditors (CoC).
The tribunal's bench issued this directive while overturning the RP's verdict to exclude Glas Trust and Aditya Birla Finance from the CoC, which is tasked with managing the insolvency resolution process for Byju's.
Furthermore, it instructed the Insolvency and Bankruptcy Board of India (IBBI) to commence a disciplinary investigation against the RP, asserting that his actions were “detrimental to all stakeholders.”
“The IRP's conduct in this case appears to have been intended to mislead the tribunal ... Such behavior warrants disciplinary action from the IBBI. Therefore, the IBBI should carry out the necessary inquiry into this issue,” it stated.
Glas Trust and Aditya Birla Finance collectively hold 99.82 percent of the voting rights in the CoC, with Glas Trust holding 99.41 percent and Aditya Birla Finance 0.41 percent.
The tribunal also mandated the removal of the RP and directed the newly formed CoC, comprising Glas Trust and Aditya Birla Finance, to decide on appointing a new RP.
The NCLT emphasized that the resolution professional acted independently in this case, indicating that his intentions were to “mislead” the tribunal.
The original CoC, established on August 21, will reconvene to select a new resolution professional to oversee the insolvency process.
In October, the Supreme Court annulled a ruling from the National Company Law Appellate Tribunal that had halted the ed-tech firm's insolvency process. Consequently, the top court's decision allowed the insolvency proceedings to continue for the beleaguered firm.
