NCLAT tells Aakash to move appeal before NCLT to lift stay granted on amending its Articles of Association

The National Company Law Appellate Tribunal (NCLAT) Chennai on Friday (December 6, 2024) told Manipal Group Chief Ranjan Pai-backed Aakash Educational Services Ltd. to move an application before National Company Law Tribunal (NCLT), Bengaluru for lifting the stay granted by the latter for amending the company’s Articles of Association (AoA).

NCLAT told the company to move the application within one week and directed NCLT Bengaluru to decide on the matter within three weeks from the date of filing the application.

Byju’s had acquired Aakash in 2021 for $940 million, offering 70% cash and 30% equity to its founders, the Chaudhry family, and Blackstone. Later, Mr. Pai had become the largest shareholder of Aakash.

Last month, NCLT Bengaluru in its interim order told Aakash and its shareholder Manipal Health Systems not to amend the Articles of Association. This was based on an appeal filed by Singapore VII Topco I Pte Ltd, owned by Blackstone, which holds a 6.97% stake in Aakash. Blackstone and other shareholders alleged the proposed amendments sought to dilute the rights of the minority shareholders and gave more benefits to Manipal.

Later, the Karnataka High Court stayed the NCLT order, against which Singapore VII Topco I Pte and BCP Asia Athena ESC the two minority shareholders in Aakash moved the Supreme Court.

In an order dated November 29, The Supreme Court told Manipal Health Systems Private Limited and Aakash Educational Services Limited to move an appeal before NCLAT against the NCLT order within seven days and said till the first date of hearing before NCLAT the parties will not give effect to the amendments.

Before NCLAT, counsel for Aakash said the proposed amendments to the AoA was for infusing funds.

“Aakash has over 10,000 employees and 3 lakh students. We don’t want to go down the path of Think and Learn (Byju’s parent). We want to stay afloat,” the counsel added.