Priyanka Tiwari
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On March 18, Jagdish Chand Chaudhary, founder of Aakash Educational Services Ltd (AESL), filed a petition with the National Company Law Tribunal (NCLT), challenging the company's proposed amendments to its Articles of Association (AoA). Chaudhary joined forces with other minority shareholders in opposition to the changes suggested by the board.
This marks the second legal battle between Aakash—a subsidiary of Byju’s—and its minority shareholders, with Chaudhary now actively involved. The founder's move underscores growing concerns over the governance of the company.
Minority Shareholders’ Concerns and Legal Action
The amendments to the AoA, proposed by the Aakash board in 2024, have been strongly contested by Blackstone-backed Singapore Topco and Glas Trust, minority shareholders in Aakash. They argue that these changes would potentially allow Byju’s to reduce or sell off its shareholding in Aakash and misuse the company’s assets or cash flows to settle Byju’s debts.
The minority shareholders claim that the changes would undermine their rights and significantly reduce Byju’s control over Aakash, which is seen as a highly valuable asset in the education sector.
In a recent turn of events, Singapore Topco, which holds a 6.8% stake in Aakash, withdrew its legal application after a series of hearings. This move suggested the possibility of an out-of-court settlement, although tensions remain high among the shareholders.
Aakash’s Defense and the Role of Manipal
Aakash has defended the proposed amendments, stating that the changes are essential for securing necessary funding to keep the company on track for future growth. The company points out that Manipal Systems, the largest shareholder, is on board with the changes.
The latest legal petition, supported by Chaudhary and other minority shareholders, reiterates concerns about the potential misuse of company assets and the shift in control from Byju’s to other stakeholders.
NCLT Notices and Upcoming Hearing
The NCLT bench has issued notices to several key respondents, including:
- Blackstone-backed Singapore Topco
- Byju’s co-founders Byju Raveendran and Divya Gokulnath
- Riju Raveendran, Byju’s brother and a stakeholder in the company
- Manipal Group
The next hearing is scheduled for April 30, when the tribunal will further assess the situation and make a ruling on the legal challenge.
Aakash’s Acquisition and Recent Developments
Aakash, renowned for its extensive coaching network for competitive exams, was acquired by Byju’s in April 2021 for approximately $1 billion. In January 2024, Manipal Education and Medical Group (MEMG) made a significant investment in Aakash, acquiring a 40% stake by converting debt into equity. This strategic move further solidified the growing influence of Manipal in Aakash's operations.
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