Two minority shareholders of Aakash Educational Services – Singapore VII Topco I Pte and BCP Asia Athena ESC (Cayman) – had moved the apex court against the Karnataka High Court ruling that stayed an order of the Bengaluru bench of the National Company Law Tribunal (NCLT) barring Aakash and Manipal from amending the AoA. The proposed amendments had allegedly sought to dilute the rights of these minority shareholders.
A bench comprising Chief Justice Sanjiv Khanna and Justice PV Sanjay Kumar asked Aakash and its shareholder Manipal Health Systems to file an appeal within seven days in the NCLAT, which will hear the case as soon as possible preferably in seven days. “Till the next of hearing before the NCLAT, the parties will not give effect to the impugned resolution as directed by the NCLT,” the CJI directed, while noting that Aakash and Manipal will withdraw their petition pending before the Karnataka High Court.
Singapore VII Topco I Pte Ltd, owned by Blackstone, which holds a 6.97% stake in Aakash, and BCP Asia told the SC said that they received a notice for an EGM where one of the agendas was to amend the AoA of Aakash to grant additional rights to Manipal while deleting the Part B in its entirety. Part B granted several rights to minority shareholders, including a right to appoint a director on the board of Aakash, pre-emptive rights and information rights, they said.
In addition to deleting the minority shareholders rights, extensive rights were being conferred on Manipal, the appeals stated.
“Without this protection, Aakash and Manipal will alter the AoA and the petitioners’ rights which have vested in their favour since 2021 will be eradicated. However, the HC by granting a stay on the NCLT order has exactly done this. To make matters worse, the petitioners were not even granted a reasonable opportunity to make out their maintainability objection on account of there being an effective efficacious remedy as the orders passed by the NCLT are appealable before the NCLAT under Section 421 of the Companies Act, 2013,” the appeals stated.
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Singapore VII Topco said that the HC by staying the effect, operation and implementation of the NCLT order had “denuded them of the interim protection for no fault of their own,” and “granted interim reliefs without determining the maintainability of the petitions.”“No reasonable opportunity was granted to the petitioners and the HC while passing the impugned order did not provide any reasoning for grating the interim stay,” they alleged.
Byju’s had acquired tutorial chain Aakash in a cash and stock deal estimated at $950 million in April 2021.
