The National Company Law Tribunal (NCLT) on Wednesday restrained Aakash Educational Services from passing a resolution to amend its articles of association (AoA), till the insolvency matter of its parent firm, Think and Learn, which runs Byju’s, is disposed of.
This effectively means that Aakash will have to wait for making any changes in its governance structure, in favour of Manipal Group which has emerged as the largest shareholder in the educational firm.
Wednesday’s interim order by the NCLT was passed on the petition of Byju’s lenders, who had alleged that Byju’s management, including founder Byju Raveendran, were seeking to reduce the edtech firm’s stake in Aakash to benefit Manipal Education, which has become the largest shareholder in the latter.
Glas Trust, which represents a group of US entities that lent $1.2 billion to Byju’s had raised objections to the extraordinary general meeting (EGM) convened on Wednesday by Aakash to amend its AoA. Glas Trust had said that the EGM may affect Byju’s insolvency process. It has questioned the decision of the resolution professional of Think and Learn to allow Raveendran to represent the company on Aakash’s board.
Apart from Glas Trust, private equity firm Blackstone, a minority shareholder in Aakash, had also filed a plea opposing the EGM.
The EGM, allegedly aimed to enhance the rights of Manipal Education, which owns 40% of Aakash, while diluting the rights of Byju’s and other minority shareholders.
The lenders have accused Byju’s of misusing its assets, alleging that the EGM sought to strip shareholders of their rights through amendments to Aakash’s AoA. The alleged move was being seen as an attempt to reduce Byju’s control over its highly valuable asset.
“The RP is not bothered even though the assets of the company are being frittered away,” Glas Trust’s counsel had told the tribunal during a hearing on Tuesday. Blackstone’s counsel had called the proposed EGM an “act of oppression” against minority shareholders.
Byju’s had acquired Aakash in 2021 for $940 million, offering 70% cash and 30% equity to its founders, the Chaudhry family, and Blackstone. However, the merger fell apart in 2023 after the Chaudhry family refused to complete a share-swap deal, citing governance concerns. In January 2024, the Manipal Group purchased a 40% stake in Aakash, becoming its largest shareholder.
