In a significant development, the National Company Law Tribunal (NCLT) has intervened to prevent changes to Aakash Institute’s Articles of Association (AoA), a move challenged by investors of Byju’s parent company, Think and Learn Private Limited. The tribunal’s decision temporarily blocks a resolution aimed at altering the AoA, which investors claim would dilute their stake in the education company.
The order stems from a petition by Singapore VII Topco I Pte. Ltd., a Blackstone-owned entity holding a 6.97% share in Aakash. The investors argued that their rights were at risk due to proposed amendments slated for discussion in an Extraordinary General Meeting on November 20. NCLT’s bench directed Aakash to freeze any action on the contentious resolution until further hearings scheduled for December 19.
Battle Over Aakash: Core to Byju’s Valuation
Aakash Institute, acquired by Byju’s in 2021 for $1 billion, has remained a key profit driver through its widespread network of physical learning centers. As Byju’s faces mounting financial scrutiny, investors argue that Aakash represents the core of the ed-tech giant’s valuation, asserting that undermining investor protections would destabilize their stake in the business.
The dispute centers on a Merger Framework Agreement (MFA), under which shares were allocated. While Aakash’s shareholders claim the merger never materialized as intended, thus voiding investor rights, petitioners counter that their status as shareholders stands regardless of the MFA’s execution. Allegations of collusion between Aakash’s majority shareholders and its management to sideline investor protections further fueled the conflict.
Arbitration and Allegations
Adding another layer, Think and Learn Private Limited initiated arbitration proceedings against Aakash’s shareholders at the Singapore International Arbitration Centre (SIAC). Meanwhile, investors point to confidentiality breaches, asserting that sensitive details of the MFA have been exploited in the ongoing dispute.
This intensifying legal battle underscores the stakes involved in controlling Aakash Institute, with implications not just for Byju’s financial stability but also for investor confidence in the embattled ed-tech sector. The tribunal’s intervention marks a critical juncture, as stakeholders brace for a contentious December hearing.
