Byju’s resolution professional aims at Raveendran Singapore firm in Aakash control battle

AESL, which TLPL acquired in April 2021 for approximately $950 million in cash and shares, is an operational part of the Byju empire. He earned this much income ₹2,433 crore in fiscal 2023 (data for the last two fiscal years has not been submitted to the ministry of corporate affairs). TLPL’s lenders are battling Raveendran and other shareholders for control of AESL.

In a legal notice dated January 8, TLPL resolution expert Shailendra Ajmera wrote to lawyers for directors of Singapore-registered Beeaar Investco Pte Ltd, claiming that the Raveendran investment firm’s actions had caused “significant harm and prejudice” to TLPL, which is under insolvency resolution process.

Ajmera is a transaction advisory services partner of advisory firm EY. A resolution professional, also referred to as an insolvency administrator, is an insolvency professional appointed under India’s insolvency law, the Insolvency and Bankruptcy Code (IBC), to handle the resolution process of an insolvent company, including taking control of operations, collecting creditors’ claims, and guiding a resolution plan.

At the center of Byju’s broader dispute is a $1.2 billion term loan obtained in November 2021 from a group of US-based hedge funds and distressed asset investors. The loan was backed by a 100% equity pledge from Byju’s Alpha Inc., a US subsidiary included in the debt structure. The lenders alleged in US court hearings that the pledged shares were transferred first to Beeaar and then to a third party, in violation of their rights.

In July 2024, GLAS Trust Co., the administrative and collateral agent for TLPL’s $1.2 billion lenders. The LLC moved the Bengaluru bench of the National Company Law Tribunal (NCLT) to initiate insolvency proceedings against TLPL. The lenders said they went to court after months of failed restructuring talks and allegations of default under the term loan.

Since then, GLAS Trust has dominated TLPL’s creditors’ committee and had an order from the National Company Law Appellate Tribunal stating that it had 99.41% of the voting share.

Transfer of ownership of AESL

Ajmera’s notice reviewed by MintHe alleged that Beeaar, through representatives, supported amendments to AESL’s articles of association (AoA) at shareholder meetings; These were changes that eliminated TLPL’s exclusive rights and gave them to the Manipal Group, which today owns 58% in AESL. The group, led by Bengaluru-based billionaire Ranjan Pai, who operates in the education and healthcare space, backed Raveendran as one of the first funders of TLPL.

Such an abrogation of the lender’s rights Mint there was reported On December 5, he had raised legal and governance questions regarding Beeaar’s participation in AESL. ₹250 crore rights are issued and ultimately who controls the shares, benefits from it and can transact.

These concerns deepened further in applications filed with the Registrar of Companies (RoC). Mint reported On December 11, it was revealed that United Arab Emirates-based businesswoman Bisy Philip had subscribed for approximately 32.2 million shares. ₹16.09 crore on the same rights issue – exactly matching the stake that AESL later publicly disclosed as belonging to Beeaar.

What made Philip’s involvement in the rights issue intriguing was that she was the wife of Rajendran Vellapalath, who was named in US court filings regarding some of Byju’s US assets.

This overlap raised the possibility that Beeaar’s stake in AESL was directed to Philip, a title also included in the resolution professional’s notice.

In the notice, Ajmera claimed that Beeaar was not recorded as the purchaser of the new shares and Philip was listed as the subscriber; This showed that Raveendran had given up his rights to the Singapore investment vehicle in his favor.

peeling the onion

The solution specialist’s Jan. 8 announcement also names two Singapore-based senior executives of global professional services firm Alvarez & Marsal (SE Asia) Pte. Ltd — Joshua James Taylor, managing director, and Srikanthan (Rajan) Natarajan, senior director — serve as directors of Beeaar.

In the letter, Ajmera alleged that “at all material times” the duo were Beeaar’s sole directors with the “sole and exclusive power and authority” to act on Beeaar’s behalf in AESL-related matters and were liable for Beeaar’s conduct which allegedly diluted TLPL’s rights in the Aakash company.

Ajmera’s notice listed AESL board meetings where resolutions were used to divest TLPL of exclusive rights and give them to the Manipal Group. In January 2023, the resolution expert alleged that Taylor and Natarajan supported a board resolution to appoint Raveendran as director and subsequently make him managing director in November that year. It was claimed that AESL’s articles of association were changed in September 2024. These moves were used to strip TLPL of exclusive rights and give them to Manipal Group, the notification said.

Taylor and Natarajan denied the allegations. In a response sent to Ajmera on January 9, they said they were appointed administrators of Beeaar for a limited purpose following an “event of default” within the financing involving alternative investment management company Davidson Kempner, following which Davidson Kempner approached them to become a nominee director in July 2023.

They also said they were not aware of and did not attend many of the AESL shareholder meetings and actions mentioned in the notice, including those relating to the rights issue and the alleged waiver in favor of Philip. They added that although AESL received contact information for at least some meetings, they were not notified.

Additionally, regarding the rights issue, the resolution professional’s notice showed that Beeaar was not listed as receiving new shares, while Philip had subscribed to the latest AELS rights issue.

“Given that the shares subject to the rights issue are issued only on nominal value, Beeaar’s waiver (of rights to the rights issue) in favor of Ms. Bisy Philip is clearly intended to consolidate Mr. Rajendran Vellapalath’s rights in AESL,” the statement added.

In their response to the decision expert, Taylor and Natarajan refused to authorize any waiver or rights-related action and said they had no knowledge of Philip or Vellapalath.

Mint AESL reached out to Raveendran, Manipal Group, Byju’s, Philip and Alvarez & Marsal, as well as two of their executives named in the notice, but did not receive a response from any of them.

Basic legal questions

At the heart of the decision professional’s notice and A&M executives’ rebuttal is a simple but decisive question: Were Beeaar’s rights and votes exercised through valid mandates or through documents that administrators say they never signed?

According to experts, these disputes are mostly resolved on paperwork; board decisions, signatures, and internal controls that show who has authority and how that authority is circumvented.

“Since the issue of rights is a legal right, any waiver must be a ‘voluntary and conscious act’ of the shareholder. If the resolution professional can prove that the waiver is fraudulent or unauthorized, the assignment to the third party becomes void ab initio,” said B. Shravanth Shanker, managing partner of B. Shanker Advocates Llp.

On options before TLPL’s resolution professional, Shanker said a temporary injunction could be the first step to preserve the status quo and prevent further transfers of disputed shares.

He added that the more permanent solution was to file a petition under Section 59 of the Companies Act 2013, which allows the aggrieved party to seek correction of the company’s membership records. Such a petition could effectively ask the court to reverse an allegedly erroneous entry in the shareholder records and restore the record to the state it should be in.