Beleaguered edtech company Byju’s faces another hurdle as the Supreme Court on November 29 directed for a stay on the resolution to sidetrack minority shareholders to facilitate stake sale in Aakash Educational Services.

The development comes days after the National Company Law Tribunal (NCLT) on November 20 blocked Aakash from passing a resolution to amend its Articles of Association (AoA), a move that prevents Byju’s alleged attempt to dilute its stake in the firm.

Aakash has sought to amend its AOA to remove the veto rights of minority shareholders.

However, the tribunal has restrained Aakash from amending its AoA until the insolvency matter of its parent firm, Think and Learn, which runs Byju’s, is disposed of.

On November 29, the Supreme Court directed Aakash to move the National Company Law Appellate Tribunal (NCLAT) to challenge the NCLT stay. It has directed that until further orders by the bankruptcy appellate tribunal, AOA shall not be amended.

NCLT’s interim order stops any changes to Aakash’s governance structure until the tribunal issues a final decision in the ongoing legal dispute.

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The decision follows allegations from Byju’s’ lenders including Blackstone-backed Singapore Topco, who claim that Byju’s management, including founder Byju Raveendran, were seeking to reduce the edtech firm’s stake in Aakash to benefit Manipal Education, which has become the largest shareholder in Aakash.

Blackstone alleged that Byju’s is looking to defeat minority shareholder rights, in favour of larger shareholders like Manipal Health, which holds around 40% stake in Aakash.

Byju’s, once India’s most valued startup, is looking to sell a stake to Manipal Health in Aakash to raise funds.

Also Read: Byju’s founder accused of trying to regain firm with hidden cash