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Tag: Aakash Educational Services Limited

  • Aakash Drags EY Into Byju’s Battle: NCLT Petition Adds New Twist to Edtech Dispute

    According to court documents examined by a media group, the conflict between Aakash Educational Services (AESL) and edtech company Byju’s has intensified.

    Aakash filed a strongly worded petition before the National Company Law Tribunal (NCLT) in Bengaluru, accusing international consulting firm Ernst & Young (EY) of professional misconduct and conflict of interest.

    In a June 1 implementation application, AESL has sought the tribunal to either declare EY LLP and its partner Ajay Shah respondents in the case or dismiss Byju’s company petition, which was filed under Sections 241 and 242 of the Companies Act and claimed oppression and mismanagement.

    AESL Allegations Against EY

    Through Shailendra Ajmera, Byju’s Resolution Professional (RP) and a senior EY employee, AESL claims that EY, which has provided the company with a wide range of strategic, financial, and compliance-related advice services, is now working against it.

     According to the application, this is a typical instance of conflict of interest and procedural abuse. EY designed and managed the very transactions that are currently under attack in the petition, including the issuance and conversion of non-convertible debentures (NCDs), equity restructuring, and internal governance issues.

    The petition states that EY provided advice to Davidson Kempner about the structuring and valuation of NCDs. Additionally, it offered tax and regulatory advice with the transfer of shares to the Manipal group.

    Furthermore, as recently as October 2024, EY participated in corporate strategy and internal board-level decisions at AESL.

    AESL Showcased Evidences to Validate its Claims

    In order to demonstrate EY’s purported participation in financial forecasts, liquidity management, and decision-making processes, AESL is displaying internal emails and advisory documents.

    According to AESL’s submission, the RP has concealed important information, is going outside his authority under the Insolvency and Bankruptcy Code (IBC), and lacks standing to submit this petition under the Companies Act.

    Ajmera’s status as RP is “severely compromised”, according to AESL, which has also threatened to take the issue to authorities, such as the Ministry of Corporate Affairs and the Insolvency and Bankruptcy Board of India (IBBI).

    The action signals a larger governance challenge in the continuing battle, as the RP wrote to the AESL board a few days ago to ask for clarification on the independence and nomination status of its directors.

    One of the main points of contention in the edtech giant’s continuous financial and legal issues is the dispute over Aakash, which Byju’s purchased in 2021 for $1 billion.

    The board of AESL is currently under the leadership of the Manipal company, which acquired a sizable interest by turning debt into equity.

    This submission challenges Byju’s petition’s validity as well as the advisers’ professional neutrality, setting up AESL for a full-scale legal and reputational onslaught. The RP and EY have not yet submitted a formal response to the implementation request.

  • Aakash Alleges Conflict of Interest by EY, Demands Byju’s-Related Records

    As part of its ongoing legal battle with Byju’s, Aakash Educational Services Ltd. (AESL) has accused EY of professional misconduct and conflict of interest.

    The main focus of the case is AESL’s governance and control problems after Byju’s failed takeover. AESL’s legal team claimed in a strongly written letter dated May 17, 2025, that EY offered advisory services to both AESL and Byju’s in a dual capacity, even though EY was fully aware of their entangled relationship.

    EY was ordered to stop all activity and keep all contact records for any legal procedures by AESL, which called EY’s actions “unethical and legally untenable”.

    Manipal Group Also Not Happy with EY

    The Manipal Group, a major AESL stakeholder, was represented by CrestLaw Partners, who also questioned EY’s involvement in providing the group with tax, accounting, and regulatory compliance advice.

    As the majority shareholder in AESL, CrestLaw wrote in a letter dated May 21 that the company would also like to note that their client, the Manipal Group, has been informed that there are significant correspondences in AESL’s records that demonstrate that EY was a constant factor in both operations and advice given to Mr Byju Raveendran, Byju’s, AESL, Aakash Choudhry, Blackstone, and our clients, the Manipal Group.

     “Your involvement in the Corporate Insolvency Resolution Process (CIRP) in any way, through anyone, is a matter of considerable concern, regret and amounts to misconduct,” the statement continued.

    EY responded to a media outlet by saying that it denies all accusations and takes client confidentiality and security very seriously. EY is therefore unable to provide any additional commentary on this issue.

    Sanjay Garg, the legal head of AESL, emphasised the importance of the matter and said that the organisation has enough evidence to present to any adjudicating or regulatory body to imply that participation in the CIRP process would interfere with the independent professional duties that organisations like you are supposed to carry out.

    He went on to say that if EY did not understand the gravity of our point—that EY was both an advisor and a participant in many of the decisions—AESL would be forced to take the necessary action.

    This comes amid a lingering legal battle between AESL and Byju’s, which started when Byju’s purchased AESL in 2021 for around $950 million in a deal that involved 70% cash and 30% equity.

    The deal called for shares in Think & Learn to be distributed to the Chaudhry family, Aakash’s promoters, and the massive private equity firm Blackstone.

     However, the Chaudhry family’s refusal to exchange their remaining shareholding, citing governance concerns, caused difficulties for the share transfer.

    The family eventually received a legal notification from Byju’s. Blackstone, the Chaudhary family, shareholders, Ranjan Pai’s Manipal Group, and Byju’s engaged in a bitter court war for control of Aakash, which has been enmeshed in insolvency procedures for more than two years.

  • Glas Trust’s Bid in the Minority Rights Lawsuit Opposed by the Aakash & Manipal Group

    According to reports, Aakash Education Services Limited (AESL) and its majority investors have requested the National Company Law Tribunal (NCLT) to deny Glas Trust’s request to join a lawsuit that aims to prevent the coaching chain from taking away the minority owners’ reserved rights. The coaching division of struggling edtech BYJU’S, private equity (PE) firm Blackstone, and Ranjan Pai’s Manipal Education & Medical Group presented the argument to the tribunal on February 12, according to a media report.

    This occurred during the NCLT’s consideration of a petition from Aakash’s minority shareholders, who assert that the coaching chain is attempting to “remove their rights” and grant special rights to Manipal Education & Medical Group (which holds a 40% stake in AESL). However, since the insolvency-plagued edtech firm is a minority shareholder in Aakash, Glas Trust, which represents BYJU’S’s US-based creditors, wishes to be a party to the case. As both parties (AESL and minority shareholders) had made their cases during the hearing, AESL’s attorney reportedly asked the tribunal to postpone making a decision.

    Argument Presented in Front of NCLT

    The motion was denied by NCLT, which stated that Glas Trust had not yet presented its case. According to reports, Aakash’s attorney, CK Nandakumar, contended that they waited until the session was almost over before saying, “No, no, we have something to say.” They ought to have spoken sooner if they had anything to say. “They have nothing to do with me,” he added. Why are they delaying the hearing on my vacate application if that is the case? Regarding this case, this individual is an absolute stranger.

    According to reports, senior counsel Srinivasa Raghavan, speaking on behalf of Glas Trust, contended that BYJU’s insolvency process would be impacted by the withdrawal of minority shareholder rights because the edtech firm would “lose control” of its lucrative affiliate (AESL). “The representative of Think & Learn (BYJU’S parent) must give their explicit assent to every board resolution.

    Only with the presence of a Think & Learn representative can a quorum be created for each shareholders’ meeting. According to reports, Raghavan stated before the NCLT, “Now, the entire set of articles that control Think & Learn over Aakash is being sought to be removed.”

    Further Argument on EGM

    The extraordinary general meeting (EGM) held by Aakash in November 2024 was also questioned by Glas Trust’s attorney at the hearing, who claimed that the resolution adopted there was void. Citing his justification, Raghavan argued that because the edtech was already in the insolvency process, the promoters of BYJU’S attended the EGM on behalf of Think & Learn rather than the resolution specialist. In response, the NCLT asked Aakash to describe how the resolution was approved despite an unauthorised individual attending the meeting.

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  • Aakash Supposedly Discontinues its Digital School Initiative Following Layoffs

    According to reports, Aakash Digital Classroom Program (AD-CRP), a digital classroom initiative, has been discontinued by Aakash Educational Services Limited (AESL). This occurs in the middle of the company’s recent layoffs.

    The AD-CRP team, which was formerly a part of Byju’s—which acquired Aakash in April 2021—has now been merged into Aakash’s sales system, according to a report published by a media outlet. This action implies a change in Aakash’s approach, with the company giving priority to its offline presence and growing its network of physical branches.

    Previous reports from August and September detailed layoffs at Aakash that affected middle and senior management as well as a few long-term workers. The remaining AD-CRP team members were given the option to work for Aakash in their offline outlets or were integrated into their call centre model. Individuals who turned down these offers were let go or resigned.

    This reorganisation suggests that Aakash may be changing how it prepares for tests. Although the corporation still maintains its online resources, the recent programme shutdown and layoffs indicate that they are putting more of an emphasis on fortifying its sales network and physical infrastructure.

    Students May Face Challenges

    Due to the abrupt termination, students who had registered in the AD-CRP program might encounter difficulties. Regarding the termination of the AD-CRP initiative and the justification for this tactical change, Aakash has not yet made an official statement.

    According to sources, layoffs have not ceased for the previous two weeks. Since associates made up the majority of the AD-CRP team, associate layoffs have occurred most frequently. A few also came from the ranks of manager and senior manager.

    January marks the start of the new season. For the last six and a half months of revenue, they have been spending on AD-CRP team. All of them have now been let go, regardless of their performance. They stated that they were done with this function in Aakash. Byju’s paid $940 million to acquire Aakash in April 2021. During a hearing before the National Company Law Tribunal in March of this year, Think and Learn, the parent company of Byju, and Aakash withdrew their merger motion.

    Why Merger With Byju’s Was Withdrawn?

    Aakash Educational Services Ltd (AESL) and Byju’s have opted to withdraw their merger application, citing it as a pre-planned procedural move. When Byju’s first purchased Aakash in April 2021, the plan was to combine the two businesses in a $940 million cash and equity transaction. The Chaudhry family, who founded AESL, opposed completing the share swap, citing issues about governance, which put obstacles in the way of the merger. Byju’s has to contend with a parallel ‘oppression and mismanagement case’ brought by investors, which affects its operational and financial choices.

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