Aakash Educational Services Pauses Share Allocation Amid Financial Compliance Concerns

Aakash Educational Services has suspended the allocation of shares to Think & Learn Pvt Ltd, Byju's parent firm, amid concerns about non-compliance with financial regulations. The Rs 25 crore investment from Think & Learn may breach rules, prompting scrutiny by the National Company Law Tribunal (NCLT).

Aakash Educational Services Ltd (AESL) has halted the allotment of shares to Think & Learn Pvt Ltd (TLPL), parent to Byju's, over concerns of potential contravention of FEMA and other regulations. TLPL had contributed Rs 25 crore in the rights issue, which is now under NCLT examination.

AESL had initiated a Rs 100-crore rights issue to bolster working capital and operational sustainability. While shares were allocated to the Manipal Group and Beeaar Investco Pte Ltd, TLPL's share allotment was deferred due to compliance doubts, specifically relating to the Rs 25 crore subscription.

According to AESL, independent legal opinions indicated that TLPL's funding method may not comply with FEMA rules, ECB guidelines, and the Companies Act. As the case awaits adjudication, the firm has set aside TLPL's deposit, and further rights issues are being considered.

(With inputs from agencies.)