Aakash Institute Pleads with NCLT to Lift Stay Amid Shareholder Feuds

Aakash Education Services, a subsidiary of Think & Learn and the parent company of Byju’s has requested the National Company Law Tribunal (NCLT) on Tuesday to countermand an order that prevented it from amending its Articles of Association (AoA), citing the need to raise funds.

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What actually happened? 

As reported by Bar and Bench, the coaching company has appealed to the Tribunal to lift the stay order in favour of its investor Singapore Topco which currently prevents it from amending its article of association (AoA) and raising funds to sustain its business.

A senior counsel representing the coaching centre operator stressed the seriousness of the situation, stating: "These are physical classes. We have 5,000 teaching and non-teaching staff and 3.5 lakh students. We need to raise funds." [Source: MoneyControl]

He clarified that the company's largest shareholder, Manipal Systems is keen to inject funds but unable to proceed due to the ongoing stay.

The dispute started from an NCLT order preventing Aakash Institute’s attempt to amend its Articles of Association (AoA) during an Extraordinary General Meeting (EGM).

The proposed amendment necessitated a change in reserved rights, which Singapore Topco claims would dilute its 6.8% stake in Aakash.

This stake was acquired as part of a larger Merger Framework Agreement (MFA) with Aakash-owned Byju's.

Meanwhile, Blackstone-backed Singapore Topco filed the initial petition saying that it was not involved in discussions regarding the changes and asserted that the amendment would greatly diminish the value of its investment. The investor further claimed that Aakash's valuation is crucial to Byju's overall worth, and any attempt to dilute their ownership would be detrimental.

In response, Aakash refuted these assertions, claiming that the Master Framework Agreement (MFA) with Byju's, which had anticipated a merger between the two parties, ultimately did not come to fruition. Consequently, the company maintains that the rights previously held by Blackstone under the agreement are now invalid.

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