9 months ago
Riju Challenges Byju's Glas Subsidiary's Financing Deal at NCLT
Imagine a company called Byju's, which is having trouble with its finances.
One of its parts, called TLPL, owns a piece of another company, Aakash.
Aakash is offering new shares, like selling tickets to a show, and TLPL wants to buy some.
A big investor, Glas, wants to help TLPL buy these tickets by giving it money.
Glas is proposing a special deal called a CCD.
But another person involved with Byju's, named Riju, thinks this deal is not fair.
He believes Glas is trying to give money in a way that breaks India's rules for foreign investments and borrowing money from outside the country.
Riju says this deal looks like a loan but is being called something else to hide the fact that it might be against the rules.
He has asked a special court, called the NCLT, to stop this deal and say it's not allowed.
The court will now decide if this deal is okay or if it's breaking the law.
Riju Ravindran has filed a case at the NCLT against a financing agreement between Byju's firm TLPL and a Glas Trust subsidiary.
The agreement involves Compulsory Convertible Debentures (CCDs) intended to raise funds for TLPL's participation in Aakash Educational Service Pvt Ltd's rights issue.
Riju alleges the CCD agreement violates FDI and FEMA regulations, characterizing it as an illegal external commercial borrowing.
Glas Trust, holding majority voting rights in TLPL, supported the CCD resolution in a Committee of Creditors meeting, despite other members abstaining.
Riju seeks to have the CCD agreement declared void, illegal, and unenforceable under Indian law.
- Who
- Riju Ravindran, a suspended director and promoter of Think & Learn Pvt Ltd (TLPL), has filed a case against a subsidiary of Glas Trust Co.
- What
- Riju is challenging a Compulsory Convertible Debenture (CCD) agreement between TLPL and Glas's subsidiary, alleging it violates FDI and FEMA regulations and is an illegal attempt to raise funds for Aakash Educational Service Pvt Ltd's rights issue.
- Where
- The case is filed before the Bengaluru bench of the National Company Law Tribunal (NCLT) in India.
- When
- The NCLT case was filed after a Committee of Creditors meeting on November 5, 2025, and is expected to be heard this week. The Aakash rights issue offer was made on October 29, 2005.
- Why
- Riju alleges the CCD agreement is a disguised external commercial borrowing and not a legitimate FDI, intended to circumvent Indian financial regulations and illegally finance participation in the Aakash rights issue.
Riju's Stance
Glas Trust's Stance (Implied)
Nature of the agreement
Riju's Stance
Riju alleges the Compulsory Convertible Debenture (CCD) agreement with Glas's subsidiary is a disguised external commercial borrowing (ECB) violating FEMA and FDI regulations, as it's not truly 'fully and compulsorily convertible'.
Glas Trust's Stance (Implied)
Glas Trust, through its subsidiary, proposed the CCD to raise funds for TLPL to participate in the Aakash rights issue, indicating their belief in the legality and utility of the financing mechanism.
Legality and Propriety
Riju's Stance
Riju argues the CCD is an 'unusual financial instrument' that is legally impossible to be both an ECB and CIRP cost, and lacks market-based valuation, demanding it be declared void and unenforceable.
Glas Trust's Stance (Implied)
The resolution professional, influenced by Glas's majority voting rights, approved the resolution to proceed with the CCD arrangement, suggesting an acceptance of its validity from their perspective.
Purpose of Financing
Riju's Stance
Riju claims Glas is attempting to raise money 'illegally' to participate in the Aakash rights issue, circumventing regulations.
Glas Trust's Stance (Implied)
Glas stated the purpose of the CCD was to help TLPL raise funds within short timelines for the Aakash rights issue, citing TLPL's lack of funds.
Key facts
- Complainant
- Riju Ravindran (suspended director and promoter of TLPL)
- Respondent
- Glas Trust Co. subsidiary and Think & Learn Pvt Ltd (TLPL)
- Tribunal
- National Company Law Tribunal (NCLT)
- Alleged Violation
- Foreign Direct Investment (FDI) and FEMA regulations, External Commercial Borrowing (ECB) norms
- Financing Instrument
- Compulsory Convertible Debenture (CCD) agreement
- Purpose of Funds
- To participate in the rights issue of Aakash Educational Service Pvt Ltd (AESL)
- TLPL's AESL Stake
- Approximately 25.7%
- TLPL's Rights Issue Offer
- Approximately ₹25.75 crore
Quotes
Riju
A suspended director and promoter of TLPL
“Despite these serious concerns being raised by the Applicant's representative, the RP proceeded to declare the resolutions approved and instructed himself to expedite compliance measures. Evidently, neither the RP nor GLAS addressed any of the substantive concerns raised by the Applicant's Representative regarding the legality, enforceability, or commercial propriety of the proposed CCD arrangement.”
thehindubusinessline.com
“This is an inherent and fatal contradiction. The term 'compulsorily convertible' denotes mandatory conversion without choice, while the option of confers discretion on the holder' - these are logically and legally irreconcilable concepts. In effect, an instrument cannot be both,”
thehindubusinessline.com
Sources
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