NCLT orders status quo on Aakash Institute’s shareholding amid legal battle

Byju’s lenders, including Glas Trust, also objected, stating that Aakash remains a crucial asset for the troubled edtech firm and that any change to its shareholding could affect their interests

The National Company Law Tribunal (NCLT) on March 27 directed Aakash Education Services Limited (Aakash Institute) to maintain the current status of its shareholding until further orders, amid an ongoing legal dispute over an amendment to its Articles of Association (AoA).

The order came after Byju’s Resolution Professional (RP) raised concerns that the proposed amendment could dilute its stake in Aakask, a report by Bar and Bench notes.
Singapore Topco, a Blackstone-backed shareholder holding 6.8% in Aakash, had also opposed the move, arguing that it would impact its rights under a merger agreement with Byju’s.

Byju’s lenders, including Glas Trust, also objected, stating that Aakash remains a crucial asset for the troubled edtech firm and that any change to its shareholding could affect their interests.On the other hand, Aakash defended the amendment, saying it was necessary to raise funds for its operations. Manipal Systems, which currently holds the largest stake in Aakash, has been backing the proposed changes.

Earlier, the NCLT had restrained Aakash from implementing the amendment, but the Karnataka High Court later stayed that order, allowing Aakash to proceed. This led Singapore Topco to challenge the High Court’s intervention before the Supreme Court, which directed Aakash to halt implementation and seek resolution through the National Company Law Appellate Tribunal (NCLAT).

NCLAT, however, refused to modify the stay and instructed Aakash and Manipal Systems to approach the NCLT instead. Aakash then filed a petition to vacate the stay, but before the NCLT could decide, Singapore Topco withdrew its objection.

With multiple appeals pending before NCLAT Chennai, Byju’s RP sought urgent relief, arguing that its rights under the Merger Framework Agreement and Fallback Agreement were being compromised. Byju’s also alleged that Blackstone had sold its stake in Aakash to Manipal in violation of the merger terms.

Following the developments, the NCLT directed that Aakash’s shareholding structure remain unchanged for now and scheduled the next hearing for April 30.