Aakash Institute founder moves NCLT against changes to AoA

Jagdish Chand Chaudhary, the founder of Aakash Education Services Limited (AESL/ Aakash) and a minority shareholder in the company, has moved the National Company Law Tribunal (NCLT) against an attempted amendment to the company's Articles of Association (AoA)..As per the plea, the changes to AoA will dilute the stake of minority shareholders in Aakash, a subsidiary of ed-tech platform Byju's.A Bench of NCLT comprising Judicial Member Sunil Kumar Agarwal and Technical Member Radhakrishna Sreepada issued notice on the plea to the respondents including private equity firm Blackstone-backed Singapore Topco, Byju Raveendran, Riju Raveendran, Divya Gokulnath and Manipal, all key shareholders in the company. The matter will be heard next on April 30..Chaudhary became a minority shareholder of the company after its sale to Byju's in 2021. He has made 23 persons as respondents to the plea..This is the second round of litigation over the same issue after Blackstone-backed Singapore Topco withdrew its petition at the NCLT challenging Aakash Institute's resolution to amend its AoA. .Singapore Topco had opposed the amendment, fearing it would significantly dilute its 6.8% stake. This stemmed from a merger agreement with Byju's through which Topco acquired its shares.Glas Trust, which is one of Byju's lenders, also raised concerns, arguing that the amendment was a move by former Byju's management to dilute the company's valuable stake in Aakash.Glas Trust emphasised that Aakash is a crucial asset for Byju's..Aakash has defended the amendment, stating it is necessary to secure funding for the company. Manipal Systems is currently the largest stake holder in Aakash.The NCLT had initially restrained Aakash from implementing the amendment. However, the Karnataka High Court subsequently stayed the NCLT order, allowing Aakash to proceed.Singapore Topco challenged the High Court's authority to intervene in the matter.The Supreme Court then directed Aakash to halt the implementation and approach the National Company Law Appellate Tribunal (NCLAT) for resolution.The NCLAT refused to modify the stay order and directed Manipal Systems and Aakash to file an application for vacation of stay before the NCLT instead.Aakash subsequently filed a petition in the NCLT to vacate the stay; however the petition was withdrawn before the tribunal could adjudicate on the petition. .Glas Trust is separately pursuing a plea at the National Company Law Appellate Tribunal (NCLAT) to get its plea for stay of the amendment of AoA heard by the NCLT. .Aakash, renowned for its extensive network of physical coaching centers across India, was acquired by edtech giant Byju's in April 2021 for nearly $1 billion.In January 2024, Ranjan Pai, chairman of Manipal Education and Medical Group (MEMG), invested $300 million in Aakash, converting debt into equity and thereby acquiring a 40% stake in the company..Chaudhary was represented by Advocates P Chinnappa, Harsh Gupta, Arvind Krishna G and Priyanka M from IndusLaw. .Aakash Educational Services was represented by Senior Advocate CK Nandakumar and advocates Raj Chandrachud and Shyam Sundar..Manipal was represented by Senior Advocate Dhyan Chinnappa with Advocates Anmol Tayal and Varun S.