FILE PHOTO: Byju’s logo is seen in this image dated June 22, 2023. REUTERS/Dado Ruvic/Illustration/File Photo | Photo credit: Dado Ruvic
Aakash Educational Services Ltd (AESL) has withheld allotment of shares to Think & Learn Pvt Ltd (TLPL), the parent company of BYJU’S, in its recently completed ₹100 crore rights issue, citing concerns over possible violations of FEMA and External Commercial Borrowing (ECB) norms.
The board of AESL has approved share allotments to Manipal Group (₹58 crore) and Beeaar Investco Pte Ltd (₹16 crore) in line with their existing shareholding. However, the ₹25 crore transferred by TLPL was found not to be in compliance with the Companies Act, FEMA regulations and ECB guidelines.
TLPL, which is currently undergoing insolvency proceedings, had sought to join the matter despite the resolution expert opposing the move before the NCLT, the NCLAT and the Supreme Court. The NCLT is also probing allegations made by former TLPL promoter Riju Ravindran, who has alleged that the company raised funds for subscription by issuing debentures worth ₹100 crore through a structure that may violate FEMA, ECB and foreign exchange management (non-debt instruments) rules.
Upon AESL’s request for clarity, the RP submitted the debenture subscription agreement between TLPL and Byju’s Alpha Inc. along with a legal opinion confirming compliance. AESL then sought its own independent opinions, including from a former Supreme Court judge and a retired RBI director general – both of whom stated that the structure did not comply with FEMA or ECB rules. A senior lawyer also confirmed that the investment appears to be in violation of RBI’s main foreign investment policy.
“It is clear that the money received from TLPL is in the nature of a loan/debenture under external commercial borrowing and cannot be used to acquire equity capital,” said Sanjay Garg, general counsel, AESL. “If a regulator were to launch an investigation, Aakash could be accused of allowing a rights issue, which allowed an ECB to be used for equity investments.”
AESL said the ₹25 crore deposited by TLPL is likely to be deposited in a separate interest-bearing account until the NCLT takes a decision on the matter. The company is also considering raising another rights issue worth ₹140 crore soon.
Published on November 28, 2025