Aakash’s backers slam AoA tweak plan at NCLT

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Aakash Institute’s minority shareholders including private equity major Blackstone have denied claims by the edtech and Manipal Education & Medical Group that the reserved rights were transitory and that the company is struggling to operate due to the stay on amending its articles of association (AoA).

Senior advocate Darius Khambata, representing the minority shareholders, said that these articles are legally binding and would take precedence over any agreement between the shareholders.

“The secure protections I am given are being sought to be wiped out by the actions of the majority, the very majority against whose actions I was granted these minority protection rights. This reduces the situation to a complete mockery,” Khambata told the National Company Law Tribunal (NCLT) on Tuesday.

The matter pertains to Aakash Institute seeking to remove the rights of minority shareholders and confer special rights on Ranjan Pai’s Manipal that holds an around 40% stake in the company.

On January 7, ET reported that Aakash Institute, citing the need for funds, had asked the NCLT to lift a stay on a previous tribunal order that barred the company from amending its AoA during an extraordinary general meeting. This move followed a petition by minority shareholders accusing the current management of mismanagement and oppressing their interests.


“My exit is being prevented because Think & Learn, the other major shareholder with whom the merger was supposed to take place, has obtained an injunction against me in an emergency arbitration proceeding, stating that I will not transfer my shares to any other party. So, on one hand, I am locked in, and on the other hand, I am being told that our rights are being completely taken away. This is classic oppression,” Khambata argued.

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Dhyan Chinnappa, the senior counsel representing Manipal again argued that the minority shareholders had received rights on the shares as part of an agreement to merge Think & Learn and Aakash. The merger did not go through amid financial and regulatory issues at Think & Learn and hence these rights cease to exist.However, Khambata argued that the reserved rights remain in effect until the minority shareholders cease to be shareholders. He also noted that the edtech company has failed to provide any evidence showing that the minority shareholders are hindering the company’s operations.

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