Singapore Topco Withdraws Plea Challenging Changes In Aakash’s AoA

SUMMARY

The Blackstone-backed entity withdrew its petition without giving any reason

Earlier, Singapore Topco and Glas Trust challenged Aakash’s AoA saying that the alteration will lead to their stakes getting diluted in the startup

While Topco has effectively moved away from Aakash's path to raise external funds, its other investor Glas Trust continues to contend against the AoA

Aakash Institute’s shareholder Singapore Topco has withdrawn its petition from the National Company Law Tribunal (NCLT) challenging the company’s resolution to amend its Articles of Association (AoA).

According to a report by Bar and Bench, the Blackstone-backed entity withdrew its petition without giving any reason.

Aakash had proposed the changes to its AoA to raise external funding, which it said was critical for its survival. However, Singapore Topco and BYJU’S financial creditor Glas Trust challenged it saying that the alteration will lead to their stakes getting diluted in the startup.

The NCLT stayed the changes in the AoA via an interim order on November 20, thus preventing the company from making any changes to its governing structure until a final verdict is issued.

The block was lifted by the Karnataka High Court (HC) almost a week after, giving only a short sigh of relief to Aakash. The Supreme Court (SC) then quashed the HC’s orders on November 29 and asked Aakash to move the National Law Company Appellate Tribunal (NCLAT), which also refused to set aside the NCLT order.

Earlier, Aaksh had urged the NCLT to reverse its decision, saying that it needs to secure the funding “in order to survive and sustain its business”. On January 8, Aakash’s counsel told the NCLT that a financial crisis for it as soon as February is imminent if it was not allowed to raise money either via equity or debt.

While Topco has effectively moved away from Aakash’s path to raise external funds, its other investor Glas Trust continues to contend against the AoA. Glas Trust, which is already embroiled in a deep legal battle against Aakash’s stakeholder BYJU’S, has been arguing that the amendment was a move by former BYJU’S management to dilute Glas Trust’s own stake in Aakash.

Earlier in February, Aakash, along with its investors Blackstone and Ranjan Pai’s Manipal Education & Medical Group, urged the NCLT to reject Glas Trust’s petition to become a party to a case that seeks to stop the coaching chain from removing the reserved rights of its minority shareholders.