Think & Learn (Byju’s parent) challenged NCLT’s order allowing AESL’s EGM for a rights issue
Byju’s claimed the issue would dilute its 25% stake in AESL to under 5%.
NCLAT Chennai bench reserved verdict on GLAS Trust’s related plea
Think & Learn, the parent company of crisis-hit edtech platform Byju’s, on Monday moved the National Company Law Appellate Tribunal against the NCLT order, which last week rejected the plan to restrain Aakash Educational Services from convening its EGM for the rights issue.
The bench on October 17 refused to grant interim relief on the second plea filed by the insolvency-bound Byju’s to stay the extraordinary general meeting (EGM) scheduled for October 29.
The Chennai bench of the National Company Law Appellate Triunal (NCLAT) led by Justice N Seshasayee and Jatindranath Swain, meanwhile, reserved its verdict on an application submitted by GLAS Trust Company LLC – the US-based lender to the debt-laden edtech firm Byju’s – concerning the Extraordinary General Meeting (EGM).
It is pertinent to note that GLAS Trust owns over 90% of the voting rights in the Committee of Creditors of Byju’s. It had earlier filed an application before the appellate tribunal against the previous NCLT order, where the NCLAT had declined to pass a stay order.
During the hearing, Senior Advocate CA Sundaram who was representing the petitioners, requested a stay to safeguard the interests of Think & Learn Pvt Ltd, which holds about 25% stake in Aakash Educational Services Ltd. He argued that TLPL’s shareholding would be diluted following the rights issue.
In response, Senior Advocate Gopal Subramanium, appearing for the respondents, clarified that the October 29 meeting was merely to pass a shareholders’ resolution at AESL, after which a letter of offer would be issued to all shareholders inviting them to subscribe.
It was also submitted that AESL desperately needs funds, as it has 3.5 lakh students and 10,000 employees and has to meet those expenses. Moreover, AESL is not a part of insolvency proceedings going against Byju's, which has only a shareholding in this.
Byju's had requested the proposed EGM to keep it on hold as the rights issue will reduce its shareholding in Aakash from 25% to less than 5%. In its petition, Byju's has submitted that EGM is in gross violation of the Articles of Association. It is against the order passed by NCLT on November 19, 2024, as it ignores the participating/veto rights of Think & Learn.
BYJU's is currently going through the Corporate Insolvency Resolution Process.
