Reliance backed Dunzo Digital Pvt Ltd has been given two weeks to settle its dues with technology platform Betterplace Safety Solutions Pvt Ltd by the Bengaluru bench of the National Company Law Tribunal.
In February, Betterplace Safety Solutions, the operational creditor of Dunzo, filed for an insolvency proceeding under Section 9 of the Insolvency and Bankruptcy Code (IBC).
Reliance backed Dunzo Digital Pvt Ltd has been given two weeks to settle its dues with technology platform Betterplace Safety Solutions Pvt Ltd by the Bengaluru bench of the National Company Law Tribunal.
Dunzo had defaulted on payment with Betterplace Safety Solutions Pvt Ltd. The aim of the extension is to not add new insolvency proceedings against the already struggling firm. In February, Betterplace Safety Solutions, which is also the operational creditor of Dunzo, filed for an insolvency proceeding under Section 9 of the Insolvency and Bankruptcy Code (IBC). However, the amount owed was not disclosed by the creditor.
The extension was granted to Dunzo by the NCLT after the former asked for two weeks to reach a settlement. The matter will be heard again on June 19 by Justices K Biswal and Manoj Kumar Dubey. The counsel for Dunzo said, “We have been in serious settlement discussions with the lenders... We have [also] been receiving investments. We need two weeks till 20 June to try and resolve the matter.”
However, the counsel for Betterplace Safety Solutions said that Dunzo has been talking for a settlement for almost a year. The counsel said, ““The level of confidence is missing.”
Dunzo owes Betterplace money for a few services that were rendered, including asset management, hiring delivery staff, background checks, and merchandise—all of which were outlined in a platform subscription agreement and master service agreement.
Another operational creditor of Dunzo, Velvin Group, had also filed an insolvency case against Dunzo. The plea for the same was admitted by the Bengaluru bench of NCLT.
To add to the already existing crisis, a key investor of Dunzo, LightBox, gave up its board seat. After Reliance, with a 11.1 per cent stake, LightBox’s stake is the highest in the company. Interestingly, between August and October last year, representatives from Lightrock and Reliance Retail stepped down from the board. The co founders of Dunzao Dalvir Suri and Mukund Jha also reportedly left the company and gave up their board seats.