Aakash Accuses EY Of Conflict Of Interest Over Allen Partnership, Sends Legal Notice
Aakash has demanded that EY immediately step down as process advisor in Byju's insolvency proceedings.
Aakash Educational Services Ltd. has issued a second legal notice to partners and officials of Ernst & Young LLP, accusing the global consultancy firm of conflict of interest and professional misconduct, as per a notice on Friday.
The notice, sent through Senior Advocate CV Nagesh, alleges that EY acted against AESL's interests while simultaneously advising its direct competitor, Allen Career Institute.
Aakash claims that EY had been closely involved in its financial operations since 2021 including advisory on a proposed merger with Think & Learn Pvt. Ltd. (Byju's). The consultancy also handled Aakash's debenture-to-equity conversions, and also served as the "exclusive financial advisor and official result validators" to Allen, which the company claims is a clear breach of professional ethics.
In the legal notice Aakash has demanded that EY withdraws from advising and acting as resolution professional in the Byju's insolvency within seven days. If EY fails to withdraw, Aakash reserves the right to initiate legal proceedings against the consultancy firm, the notice read.
The move comes as EY faces heat for initiating proceedings against AESL before the National Company Law Tribunal, Bengaluru, in its capacity as resolution professional for Byju's. AESL has called the insolvency plea "malafide" and alleged it was filed with the intent to disrupt its operations.
"EY acted as exclusive financial advisor and result validator to a competitor which is a matter of deep concern," said Sanjay Garg, head of legal. He added that EY officials, including partner Ajay Shah, had already been impleaded in the pending oppression and mismanagement case filed by the resolution professional of Byju's, who is also from EY. AESL has demanded that EY immediately step down as process advisor in Byju's insolvency proceedings.
According to Aakash, EY's refusal to furnish key documents and communications despite repeated requests via emails dated April 12, May 6, and May 17 raises serious questions. The company says these materials are critical to understanding EY's role in structuring financial transactions, including the now-shelved merger with Byju's and debenture conversions.
The notice also cites whistleblower emails from an EY employee that reportedly reveal attempts to orchestrate fraudulent insolvency proceedings and coordinated legal actions against AESL at the behest of EY and GLAS Trust Co. LLC. These claims are currently before the NCLT.
Garg further pointed to past disciplinary action against EY partner Dinkar Venkatsubramanian. "Such allegations are not new to EY… It's high time that the affairs of EY must be investigated at the highest level for its professional dishonesty and violation of statutory norms," he said.
The legal notice has been dispatched to EY's offices across Gurgaon, Bengaluru, Mumbai and New Delhi, and names several senior EY partners and officials, including Shailendra Ajmera, Ajay Shah, Riad Joseph, Dinkar Venkatsubramanian, Pulkit Gupta, Lokesh Gupta, Rahul Agarwal and Renu Kochar.
