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Business Standard
3 days ago
- Business
- Business Standard
Aakash Educational moves NCLT to implead EY in edtech firm Byju's dispute
The dispute between Aakash Educational Services (AESL) and edtech firm Byju's has escalated, with Aakash filing a sharply worded petition before the National Company Law Tribunal (NCLT) in Bengaluru, alleging conflict of interest and professional misconduct by global consulting firm Ernst & Young (EY), according to court filings reviewed by Business Standard. In an impleadment application filed on June 1, AESL has urged the tribunal to either dismiss the company petition filed by Byju's under Sections 241 and 242 of the Companies Act, alleging oppression and mismanagement, or make EY LLP and its partner Ajay Shah respondents in the case. AESL alleges that EY, which has been involved in a wide range of strategic, financial, and compliance-related advisory services for the company, is now acting against it through Shailendra Ajmera, the Resolution Professional (RP) of Byju's, who is also a senior EY functionary. 'This is a classic case of conflict of interest and abuse of the process,' said the application. 'The very transactions now being challenged in the petition — such as the issuance and conversion of non-convertible debentures (NCDs), equity restructuring, and internal governance matters — were structured and overseen by EY,' the application added. According to the filing, EY advised on the valuation and structuring of NCDs issued to Davidson Kempner. It also advised on tax and regulatory aspects of equity conversion to the Manipal group. Additionally, EY was involved in internal board-level decisions and corporate strategy at AESL as recently as October 2024. AESL is showcasing internal emails and advisory documents, evidencing EY's alleged involvement in financial forecasting, liquidity management, and decision-making processes. 'The RP has suppressed material facts, has no locus standi to file this petition under the Companies Act, and is acting in excess of his powers under the Insolvency and Bankruptcy Code (IBC),' AESL said in the filing. AESL has also warned that it may escalate the matter to regulators, including the Insolvency and Bankruptcy Board of India (IBBI) and the Ministry of Corporate Affairs, alleging that Ajmera's position as RP is 'severely compromised'. The move comes just days after the RP wrote to the AESL board, seeking clarity on the independence and nomination status of its directors, signalling a broader governance challenge in the ongoing tussle. What's at stake The fight over Aakash, which Byju's acquired in a $1 billion deal in 2021, has become a flashpoint in the edtech giant's ongoing financial and legal troubles. The Manipal group, which took over a significant stake by converting debt into equity, now controls the board of AESL. With this filing, AESL is preparing for a full-blown legal and reputational offensive, challenging both the admissibility of Byju's petition and the professional neutrality of the advisers involved. Both EY and the RP are yet to file a formal reply to the impleadment request. 'The matter is sub judice and, therefore, we cannot offer any further comment at this time. However, we refute the allegations and will defend any such legal action vigorously,' an EY spokesperson told Business Standard on Tuesday.
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Business Standard
3 days ago
- Business
- Business Standard
Aakash seeks to implead EY in Byju's case, cites conflict, misconduct
The dispute between Aakash Educational Services Ltd (AESL) and edtech firm Byju's has escalated, with Aakash filing a sharply worded petition before the National Company Law Tribunal (NCLT) in Bengaluru, alleging conflict of interest and professional misconduct by global consulting firm Ernst & Young (EY), according to court filings reviewed by Business Standard. In an impleadment application filed on 1 June, AESL has asked the tribunal to either dismiss the company petition filed by Byju's—under sections 241 and 242 of the Companies Act, alleging oppression and mismanagement—or make EY LLP and its partner Ajay Shah respondents to the case. AESL alleges that EY, which has been involved in a wide range of strategic, financial and compliance-related advisory services for the company, is now acting against it through Shailendra Ajmera, the Resolution Professional (RP) of Byju's, who is also a senior EY functionary. 'This is a classic case of conflict of interest and abuse of process,' said the application. 'The very transactions now being challenged in the petition—such as the issuance and conversion of non-convertible debentures (NCDs), equity restructuring and internal governance matters—were structured and overseen by EY.' According to the filing, EY advised on the valuation and structuring of NCDs issued to Davidson Kempner. It also advised on tax and regulatory aspects of equity conversion to the Manipal Group. Additionally, EY was involved in internal board-level decisions and corporate strategy at AESL as recently as October 2024. 'The RP has suppressed material facts, has no locus standi to file this petition under the Companies Act, and is acting in excess of his powers under the Insolvency and Bankruptcy Code,' AESL said in the filing. AESL has also warned that it may escalate the matter to regulators, including the Insolvency and Bankruptcy Board of India (IBBI) and the Ministry of Corporate Affairs, alleging that Ajmera's position as RP is 'severely compromised'. The move comes just days after the RP wrote to the AESL board seeking clarity on the independence and nomination status of its directors, signalling a broader governance challenge in the ongoing tussle. What's at stake The fight over Aakash, which Byju's acquired in a $1 billion deal in 2021, has become a flashpoint in the edtech giant's ongoing financial and legal troubles. Manipal Group, which took over a significant stake by converting debt into equity, now controls the board of AESL. With this filing, AESL is preparing for a full-blown legal and reputational offensive—challenging both the admissibility of Byju's petition and the professional neutrality of the advisers involved. Both EY and the Resolution Professional are yet to file a formal reply to the impleadment request. "The matter is sub-judice, and therefore we cannot offer any further comment at this time. However, we refute the allegations and will defend any such legal action vigorously," an EY spokesperson told Business Standard on Tuesday.
Time of India
3 days ago
- Business
- Time of India
Aakash moves NCLT to implead E&Y in oppression, mismanagement case filed by Byju's
Aakash Educational Services has filed a plea in the insolvency tribunal NCLT, seeking the dismissal of a petition submitted by edtech firm Byju's and to implead consultancy firm E&Y, along with its partner Ajay Shah. In its application, Aakash Educational Services has sought dismissal of the petition filed by Think and Learn , owner of Byju's, on the grounds of vexatious litigation couched as an oppression and mismanagement litigation, which is not maintainable in the law. Aakash Educational Services (AESL) submitted that presence of E&Y is "imperative" in the matter, as it was not only privy but the architect of several key financial and strategic decisions taken by it. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Think and Learn has filed a Company Petition before the Bengaluru Bench of the National Company Law Tribunal (NCLT) against AESL, alleging "oppression and mismanagement" in the affairs of the company under Sections 241 and 242 of the Companies Act, 2013. Think and Learn is a minority shareholder of Aakash Educational Services, which operates 316 centres throughout the country. Live Events In the company application, AESL has requested to implead and make E&Y and its partner Ajay Shah a respondent alleging "the records indicate that he helped and played a material and consistent role in advising and facilitating various parties whose interests were privileged and exclusive in a material sense". Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories "The proposed Twenty-sixth Respondent (Ajay Shah) is not only privy but the architect of several key financial and strategic decisions of the Applicant during the periods relevant to the Company Petition," it said. Shah and the team of E&Y (which is respondent no 27) always had access to all privileged and confidential information and were part of the business and strategy discussions of the Applicant Company. "In any event, since all team members, including Shah, represented E&Y, the said Respondent is being impleaded," AESL submitted, adding that "for reasons of structural and professional accountability, the presence of E&Y is imperative". AESL also alleged the Resolution Professional of Byju's, which is currently going through an insolvency resolution process, "belongs to the self-same organisation and has made no disclosure to the Tribunal about his knowledge or organisational association either in the Company Petition or before the Tribunal at the time of accepting the appointment". "This serious matter for the administration of the Insolvency and Bankruptcy Code, 2016 (IBC) requires thoughtful attention by the Tribunal," AESL submitted. It has requested the NCLT to direct the proposed respondents to file an affidavit on oath disclosing details of all transactions that Ernst & Young LLP has been involved in since 2021 till date, in relation to all related parties, including Think and Learn and GLAS Trust Company LLC. The broader legal fight centres around the governance and control of AESL, following the failed acquisition by Byju's -- which has been reeling under charges of mismanagement, and alleged misuse of company funds. Meanwhile, CrestLaw Partners, acting on behalf of Manipal Group (which holds significant stake in AESL), also approached EY, flagging the firm's involvement in advising the Manipal Group in material matters, involving tax and regulatory implications, accounting treatment among others, pertaining to AESL.
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Business Standard
26-05-2025
- Business
- Business Standard
Best of BS Opinion: Should RBI cut its intervention in currency markets?
Hello and welcome to BS Views, our daily wrap of the editorial page. The Reserve Bank of India has been generating higher surplus on account of, among other things, higher interest income and foreign exchange gains. Our lead editorial notes that higher surplus transfer to the government will help ease liquidity conditions, which, at the time of monetary policy easing, help transmission. Additionally, the RBI perhaps doesn't need to intervene excessively in the foreign exchange market. While a stable currency has its merits, excessive intervention by the central bank can weaken incentive in the private sector to hedge its exposure, besides leading to overvaluation. It can also push the private sector to raise money from overseas sources, increasing the burden on the central bank to intervene. This cycle must be avoided. The central bank can intervene at times of excess volatility, but in the normal course, it should allow the private sector to handle it. Our second editorial points out that today's Kolkata port is a logistical nightmare, partly due to the its geomorphological characteristics. Given the lack of a deep draught there, as well as at Haldia port further south, large ocean-going container ships cannot navigate up. Such a situation cannot be allowed to continue indefinitely, given that the geopolitical situation has turned adverse. A deep-sea port that allows container ships to arrive without lightening, and which connects seamlessly with road and especially rail, must be a priority. Investment will certainly be needed, but the higher priority is political will and clarity. Payments is an important industry of the modern world, one that is primarily a technology business, not a financial business. Our lead columnist Ajay Shah writes on how 'agency architecture' can be used to reshape the payments industry in India, pointing out changes at the Reserve Bank of India. The first solution in redefining the payments universe is in clarifying the core activities of regulation, while the second lies in governance arrangements. A specialised board to govern the work of payments regulation within the RBI would help. Last week's Gazette notification does that, creating a path for three independent directors to join three RBI employees on a board for payments regulation. Given the absence of these sections of law in the extant legislation, the role of the Payments Regulatory Board will have to evolve through good sense and norms. In today's second column, Surinder Sud points out that India is the second-largest global producer of fruit and vegetables after China, and even leads in several important items. In fact, horticulture has emerged as one of the key growth engines of Indian agriculture. Horticultural crops are also typically more productive and remunerative than food crops. However, wastage ranges from 15 per cent to as high as 40 per cent, and is largely because of a deficit in produce-management infrastructure. Exporters, too, face several challenges, including non-tariff trade barriers, such as arbitrarily fixed food-safety standards and stringent sanitary and phytosanitary norms. Such issues need to be addressed to sustain and boost this sunrise sector. Tim Wu reviews two books that consider the challenges with artificial intelligence, as well as its advocates, primarily Sam Altman of OpenAI. The reviewer posits that the AI industry may be facing a 'paper clip' problem, one in which both the product and producers are fixated on a solution that edges out all other activity. In 'Empire of AI', Karen Hao argues that the pursuit of an artificial superintelligence has become its own figurative paper clip factory, while 'The Optimist', by Keach Hagey, posits that the seemingly innocuous paper clip maker who ends up running the world for his own ends could be Altman himself. Wu points out that if the aim is not to help the world, but instead to just get bigger and better, then our problems around AI might just get bigger too.
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Business Standard
12-05-2025
- Business
- Business Standard
Best of BS Opinion: India must push through multiple headwinds
Hello, and welcome to BS Views, our daily wrap of the Business Standard opinion page. Today's edits and columns offer a path forward for India in multiple areas - military, diplomacy, trade, and climate change. How it deals with each of them will frame the future for its citizens. Read on. On Saturday, India and Pakistan reached an understanding to stop military action against each other after almost four days of an intense stand-off. While the situation is expected to stabilize, India cannot afford to let its guard down, notes our first editorial. India's fight against terror will continue, give Pakistan is unlikely to give up supporting terrorism. Also, India will face challenges as long as the Pakistan military calls the shots instead of Islamabad. However, India has economic ambitions, and terrorism and the fear of military conflict affect the business environment, so it needs to be ready at all times to foil terror attacks and respond swiftly. India's new draft 'Climate Finance Taxonomy', launched with the aim of directing capital flows toward sustainable and climate-aligned activities, is a much-needed framework during these critical times, says our second editorial. India is already feeling the financial strain of climate adaptation, given that developing countries are left to bear most of the cost on their own. This is where the green taxonomy framework will help in attracting alternative funding, while making sure all stakeholders adopt ESG safeguards. However, India must also put in place robust disclosure mechanisms to prevent so-called greenwashing, or false marketing of investment as being environmentally friendly. Ajay Shah and Susan Thomas argue that how government procurement of goods and services is conducted should be a central concern of public finance, instead of being used as a tool for political patronage, pursuing industrial policy, or for protectionism. They say that protectionism in the form of blocking foreign companies weakens competition and hurts the Indian citizen. The principles guiding public procurement, they say, should be the same that we use at home: frugality and thoughtfulness in a tough, transparent, and competitive market. However, there are nascent signs of a rebalancing in the many bilateral agreements, signaling a recognition that greater competition can be beneficial. But this needs to be complemented by systemic reforms of India's domestic procurement, along with some other steps. Globalisation, which really took off in the Nineties, has always been a game of finding the bottom, writes Sunita Narain. As pollution levels in industrialised nations grew, they simply dumped their production, and pollution, on poorer ones. In this free-market world, she says, the cost of labour and environment is discounted to stay competitive, but it has everyone hooked to its benefits despite the blows to climate change. The bubble burst when Brexit happened, showing the whole global trade machinery is about jobs. Now, with Trump's protectionist rhetoric, disengagement will come at huge costs. How a new system is designed will determine the nature of future global trade. In our book review section today, Jennifer Szalai delves into 'EMPTY VESSEL: The Story of the Global Economy in One Barge' by Ian Kumekawa, an enlightening book about a most drab object - the shipping barge, which the book's author describes as 'a dumb pontoon without voice, personality or drive". And yet, this metal box is often what girds global trade. Kumekawa, a historian at Harvard, highlights its many uses - as a 'floatel' for oil rig workers, a barracks for British soldiers, even a jail for New York City inmates - but also uses its unglamorous beginnings to trace the journey of globalization and to give it a visceral identity.
