**Title:** Aakash’s Rights Issue Faces Challenges Amid Byju’s Financial Turmoil
**Meta Description:** Aakash’s rights issue is on hold due to legal disputes involving Byju’s parent company, raising concerns over compliance and asset control.
**URL Slug:** aakash-rights-issue-byjus-financial-challenges
**Headline:** Aakash’s Rights Issue Stalled as Byju’s Faces Legal and Financial Hurdles
The investment firm, which currently owns approximately 16% of Aakash, has committed ₹16 crore in the latest rights issue. This comes at a time when Think & Learn Pvt. Ltd (TLPL), the parent company of edtech giant Byju’s, has had its ₹25-crore cheque frozen due to concerns regarding foreign exchange compliance, as indicated by corporate filings and sources familiar with the test-prep company’s capital structure. Notably, the Aakash shares held through Beeaar are reportedly central to the arbitration award and global asset freezes initiated by the Qatar Investment Authority (QIA), the sovereign wealth fund of Qatar.
Despite losing day-to-day operational control over TLPL, Raveendran appears to maintain significant minority influence over Aakash through Beeaar. TLPL is currently navigating corporate insolvency, with ownership and control still unresolved, as bids are being considered from interested parties, including the Manipal Group and Ronnie Screwvala’s upGrad.
**Board Concerns and Asset Freezes**
The directors of Aakash have suspended TLPL’s subscription due to a legal challenge from former TLPL promoter Riju Raveendran. He has approached the National Company Law Tribunal in Bengaluru to determine the legality of converting the ₹25 crore into equity, alleging that the funds were raised through a debenture issuance that may violate FEMA, ECB guidelines, and the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019. Reports indicate that the rights issue is effectively closed for all parties except TLPL, whose ₹25-crore cheque remains in a separate account.
Interestingly, the stake in Aakash held by Beeaar, which was established on March 23, 2023, in Singapore, is now under scrutiny. Qatar Holding, a division of QIA, had previously lent $150 million to Byju’s Investments Pte. Ltd (BIPL), a Singapore-based company partially owned by Byju Raveendran, in 2022. This loan was secured by 17.89 million Aakash shares, with explicit restrictions against transferring those pledged shares to any other entity controlled by Byju Raveendran. QIA initially invested $150 million in TLPL in 2019 and has accused BIPL of improperly transferring the pledged shares to Beeaar.
Following these alleged breaches and defaults, QIA terminated the agreement in March 2024 and demanded early repayment of the principal along with interest and a penalty totaling $235 million. In March 2024, arbitration proceedings were initiated in Singapore, leading to a worldwide freeze on the assets of Raveendran and BIPL, confirmed by the Singapore International Arbitration Centre (SIAC) in July 2024.
**Conclusion**
The ongoing legal and financial challenges surrounding Byju’s and its affiliates, including the rights issue of Aakash, highlight the complexities of corporate governance and compliance in the edtech sector. As the situation unfolds, the implications for stakeholders and the future of these companies remain uncertain.
**FAQ**
**What is the current status of Aakash’s rights issue?**
Aakash’s rights issue is currently on hold due to legal disputes involving its parent company, Byju’s, and concerns over compliance with foreign exchange regulations.
