Byju’s latest attempt to stall Aakash Educational Services Limited’s (AESL) upcoming shareholders’ meeting has hit a wall. The National Company Law Tribunal (NCLT) in Bengaluru has declined to stay the Extraordinary General Meeting (EGM) scheduled for October 29, where AESL plans to discuss a rights issue.
The tribunal bench, led by Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada, turned down Byju’s request for an interim injunction. The troubled edtech company—now under insolvency proceedings—had argued that AESL’s board meetings were being held in violation of the Articles of Association, effectively sidelining its participation and veto rights.
Byju’s contended that the proposed rights issue was a strategic move to slash its shareholding in AESL from 25.75% to below 5%, thereby gutting one of its few remaining valuable assets amid the ongoing corporate insolvency resolution process.
On the other side, AESL’s legal team dismissed the fresh petition as premature, pointing out that Byju’s had already filed a similar case under Sections 241–242 of the Companies Act, 2013, alleging oppression and mismanagement. That first petition, they noted, was still pending at the stage of arguments on maintainability.
AESL’s counsel further argued that the company’s Articles of Association had long outlived their practical utility and that the previous NCLT order from 2024—cited by Byju’s—was irrelevant since AESL wasn’t even a party to those proceedings. They emphasized that the rights issue was a financial necessity, not a corporate tactic, as banks had grown hesitant to extend credit amid the ongoing shareholder chaos.
The NCLT observed that a rights issue cannot be labeled inequitable simply because a shareholder may struggle to participate. Accepting such reasoning, the bench noted, would effectively paralyze a company’s ability to act in its own best interest.
Finding no immediate grounds for interference, the tribunal declined to issue any stay order, remarking, “Given the piquant situation, we do not think the petitioner should be favoured with the interim order.”
The matter will return for further hearing on November 12, alongside Byju’s earlier petition.
