NCLT has blocked Aakash from passing a resolution to amend its Articles of Association (AoA)
The move to make amendments in the AoA is said to have come as BYJU’S founder and CEO Byju Raveendran looked to sell a portion of his stake in Aakash to Manipal Education
The stake acquisition process was opposed by Aakash’s other stakeholders Singapore Topco as well as Glas Trust
Amid mounting controversies about the future of BYJU’S
and its various subsidiaries including Aakash Educational Services, the National Company Law Tribunal (NCLT) reportedly blocked Aakash from passing a resolution to amend its Articles of Association (AoA).
According to a report by Moneycontrol, the tribunal passed an interim order today (November 20) preventing the company from making any changes to its governing structure until a final verdict is issued.
The move to make amendments in the AoA is said to have come as BYJU’S founder and CEO Byju Raveendran looked to sell a portion of his stake in Aakash to Manipal Education.
The verdict, which came during the hearing of “Singapore VII Topco I Pte.Ltd. & Others Vs Aakash Educational Services Ltd & Others” effectively restricts Aakash’s parent entity BYJU’S from selling its stake in the company.
In recent times, Ranjan Pai’s Manipal Education and Medical Group has looked to increase its control over Aakash, one of two profitable entities owned by BYJU’s in addition to Great Learning.
Earlier in July, the Competition Commission of India approved the proposed buyout of a substantial stake in Aakash by MEMG. With this, MEMG became the largest shareholder of Aakash with about 40% stake in the company.
However, the stake acquisition process was opposed by Aakash’s other stakeholders Singapore Topco as well as Glas Trust.
Glas Trust, which is a consortium of US based lenders who lent $1.2 Bn to BYJU’S as a Term Loan B (TLB) filed separate pleas to oppose the extraordinary general meeting (EGM) at Aakash for the AoA amendment yesterday.
The Moneycontrol report added that another stakeholder in Aakash, Blackstone, also filed a separate plea to oppose the EGM. Blackstone contended that the amendment to Aakash’s AoA will strip its shareholders of their rights. Besides, the report adds that BYJU’S is alleged to have misused Aakash’s assets.
BYJU’S acquired Aakash in what was considered as the biggest acquisition in the edtech space globally back in 2021. The acquisition, which was made through a cash-and-stock deal for $1 Bn, has also been a hotspot of controversies.
The two parties have been at loggerheads in the past over the share swap, which forced Aakash to look for a white knight to complete the deal. This came in the form of Pai and MEMG, which now own a majority 40% stake in Aakash.
