NCLAT Rejects Byju’s Plea on Equity Fundraise by Aakash

The National Company Law Appellate Tribunal (NCLAT) has dismissed a plea filed by Byju’s, seeking approval for an equity fundraise by Aakash Educational Services. The appeal challenged an earlier interim order passed by the National Company Law Tribunal (NCLT), which had directed the parties to maintain the status quo regarding Aakash’s shareholding.

NCLAT held that the NCLT’s order was interlocutory in nature and based on consensus between the parties, and therefore found no grounds for intervention at this stage. The proposed equity raise had faced opposition from Blackstone, which holds a 6.8% stake in Aakash, citing concerns over the potential erosion of minority shareholder rights.

In its order dated June 6, 2025, the appellate tribunal noted that the NCLT’s interim order of April 30, 2025, was based on mutual consent and did not finally adjudicate the rights of the parties. The NCLT had directed that Think & Learn’s shareholding in AESL should not be diluted until the interim relief sought by it was heard on June 6, 2025. NCLAT ruled that the order was interlocutory and consensual, and did not warrant appellate interference. The appeal was accordingly dismissed.

"Since the Impugned Order takes the shape of an interlocutory order, which is not deciding any of the rights of the parties, coupled with the fact that the order takes the shape of a consenting order, no interference is called for by this Tribunal in the exercise of its Appellate Jurisdiction at this stage," the order said.

The ruling followed directions from the Karnataka High Court, which on April 8, 2025, had set aside an earlier status quo order issued by the NCLT on March 27 and remitted the matter for fresh consideration.

The case stems from a petition filed by Think & Learn under Sections 241 and 242 of the Companies Act, alleging oppression and mismanagement in AESL, in which it holds a minority stake. In response, AESL filed an application seeking dismissal of the petition as vexatious and also requested to implead consultancy firm EY and its partner Ajay Shah, alleging they played a central role in key decisions.

AESL further raised concerns about a conflict of interest, stating that the resolution professional handling Byju’s insolvency process belongs to the same organisation and failed to disclose this association. It has asked the tribunal to direct EY to disclose all related transactions since 2021.

The main petition before the NCLT, filed under Sections 241 and 242 of the Companies Act, 2013, by Byju’s, remains pending.