The Supreme Court on Friday stopped Aakash Educational Services Ltd. from implementing its resolution taken during the extraordinary general meeting, which seeks to amend the educational firm's articles of association.
Under company law, articles of association outline the rules and regulations that govern the company's operations, structure, and management.
Singapore VII Topco I Pte Ltd., which is a minority shareholder of Aakash, has contended that the proposed amendments are aimed at diluting the rights of minority shareholders. Singapore VII Topco I Pte Ltd. is owned by Blackstone, the American investment management company.
A division bench of the top court headed by the Chief Justice of India, Sanjiv Khanna, directed Aakash to move the National Company Law Appellate Tribunal in seven days from Friday and stated that the stay on implementation of the resolution will operate till the first date of hearing before the NCLAT.
The case came before the top court after the Karnataka High Court had set aside a National Company Law Tribunal order that stopped Aakash from going ahead with the implementation of its resolution, thereby allowing Aakash to go ahead.
The NCLT had passed its order in response to an oppression and mismanagement petition filed by Singapore VII Topco on November 20. The Blackstone entity has a 6.97% stake in Aakash.
The investors have been contending that the proposed amendments aim to reduce their ownership in Aakash, which was acquired by Byju's for nearly $1 billion in 2021. It was also contended that Byju's, the embattled ed-tech firm, depended heavily on Aakash for its valuation and operational stability.
Aakash, on the other hand, contended that the merger process' failure rendered the minority investors' rights null and void and that they had no claim to the company's governance structure.
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