Indian education technology company Byju's is set to challenge the insolvency proceedings initiated against it in an effort to halt the process this week. This move comes as the startup, once valued at $22 billion, faces significant challenges, according to two sources on Wednesday.

The National Company Law Tribunal (NCLT) in Karnataka ordered insolvency proceedings on Tuesday following a complaint from the Board of Control for Cricket in India (BCCI) over $19 million in unpaid dues. Currently, a court-appointed professional is managing the company.

Byju's has encountered multiple setbacks in recent years, including boardroom exits, disputes with investors over alleged corporate governance issues, job cuts, and a dramatic decrease in its valuation to under $2 billion. CEO Byju Raveendran has denied any wrongdoing.

The company plans to file an appeal with the companies law appeals tribunal in New Delhi this week, sources say. Although settlement talks with the BCCI are ongoing, Byju's aims to block the insolvency process.

A ruling by the NCLT on Tuesday led to the appointment of Pankaj Srivastava as an interim resolution professional to manage Byju's. This means the company’s board of directors is suspended, CEO Raveendran will report to the resolution professional, and the company's assets are frozen during the proceedings.

Byju's expressed a desire to "reach an amicable settlement with BCCI" and remains confident that a settlement can be achieved despite the tribunal's order. The company's legal team is reviewing the order and will take necessary actions to safeguard Byju's interests.

During the COVID-19 pandemic, Byju's gained popularity by offering online education courses and currently operates in over 21 countries. It also provides offline coaching classes. In February, a group of investors, including Prosus and Peak XV, voted to remove Raveendran, a move Byju's has deemed invalid.

The tribunal acknowledged that Byju's parent company, Think & Learn Private Limited, had utilized BCCI's services and defaulted on approximately $19 million in dues. Delhi-based lawyer Bishwajit Dubey noted that Byju's controlling shareholders can either appeal the insolvency initiation legally or quickly settle the dispute with BCCI to resolve the matter.