Aakash contends that the NCLT had not provided adequate reasoning for staying the Extraordinary General Meeting (EGM) resolution.
Karnataka: The Karnataka High Court on November 25 stayed the National Company Law Tribunal’s (NCLT) order that had restrained Aakash Educational Services from implementing a resolution to amend its Articles of Association (AoA), which could potentially dilute investor shareholding.
Aakash contends that the NCLT had not provided adequate reasoning for staying the Extraordinary General Meeting (EGM) resolution.
Justice Hemant Chandangoudar concurred with Aakash’s arguments, stating:
“It is settled law that reasons are an objective expression of an opinion, and the Tribunal must substantiate their orders in the interest of legality, propriety, and adherence to principles of natural justice. Interim order as prayed for.”
The Court emphasized that this interim order does not represent a final opinion on the matter. Further hearings are scheduled for December 2.
Senior Advocate Dhyan Chinnappa represented Aakash Educational Services, while Senior Advocates Kapil Sibal and Darius Khambata appeared for the respondents.
Earlier, on November 20, the NCLT had ruled in favor of the investors in Byju’s parent company, Think and Learn Private Limited. It directed Aakash not to implement the AoA amendment resolution, outlined as Agenda Item No.8 of the EGM, until the main petition was resolved.
This order, issued by Judicial Member K. Biswal and Technical Member Manoj Kumar Dubey, after an oppression and mismanagement petition filed by Singapore VII Topco I, a Blackstone-owned entity holding 6.97% of Aakash’s shares. The petition alleged that their rights were being oppressed through the proposed amendment.
Byju’s, which acquired Aakash Institute for $1 billion in 2021 during Pendemic, faced investor backlash. The investors, including Singapore VII Topco I, argued that the AoA amendments sought to undermine their protected rights and could dilute their shareholding in Aakash, a key profit-generating asset.
Before the tribunal, lenders alleged that the former management tried to amend the Articles of Association (AoA) to dilute the shareholding.
Senior Advocate Ramji Srinivasan, representing the RP, asserted that Aakash is a subsidiary of Byju’s and that the RP would attend the EGM as Byju’s representative. He argued that the lenders were making submissions without the case being listed. However, lenders contended that Raveendran continued to exercise control over Aakash Coaching, and the RP had not intervened.
In response, Aakash asserted that the investors’ shares resulted from a Merger Framework Agreement (MFA) that did not materialize as planned. Therefore, they claimed the investors had no standing in the company. They also highlighted ongoing arbitration proceedings with Think and Learn at the Singapore International Arbitration Centre (SIAC) regarding this matter.
Case Title: Aakash Educational Services v. Singapore VII Topco I PTE LTD
