Edtech

Davidson Kempner initiates board reconstitution at Aakash: Report

• ByStartupStory     |    August 4, 2023

Reports reveal that Davidson Kempner Capital Management, a US-based investment fund, has initiated a strategic overhaul of the board at Aakash Educational Services Ltd (AESL) with the aim of bolstering governance. This move comes against a backdrop of allegations and high-stakes plans for an upcoming IPO. Aakash, a test-prep subsidiary under the purview of Think and Learn Pvt Ltd, the parent company of edtech giant BYJU’S, is set to witness a substantial transformation in its leadership structure.

Notably, Davidson Kempner has appointed four new independent and nominee directors to the AESL board, further reinforcing the commitment to elevate the company’s governance standards. The reshaped board is poised to assume its responsibilities within the next two weeks, with Byju Raveendran, the founder and CEO of BYJU’S, standing as the sole executive representative of the parent company on the AESL board.

As part of this endeavor, Ajay Khanna and Ambika Khanna, nominees of Think and Learn, have been appointed as independent directors by Davidson Kempner. Additionally, the investment fund is reportedly in discussions with Shailesh Haribhakti and Nikhil Naik for independent directorship, although a final decision is pending.

This development arrives on the heels of recent reports that Davidson Kempner has taken control over Aakash and its accounts amidst allegations of financial misconduct against BYJU’S. Furthermore, the investment fund’s role in Aakash’s financial landscape has been underscored by a $250 million capital infusion through structured instruments from Davidson Kempner against its Aakash shareholding.

The board revamp also comes as Aakash gears up for an IPO, a venture critical for BYJU’S to secure much-needed financial relief. However, this ambitious plan is intertwined with intricate equity dynamics involving AESL’s minority stakeholders, including the Chaudhry family and private equity firm Blackstone Group. Amidst these complexities, the revamped board is set to play a pivotal role in overseeing AESL’s operations, facilitating financial matters, and collaborating closely with the management team.

Furthermore, the board’s proactive stance is evident in its efforts to scout for new auditors to complete pending financial audits for fiscal years 2022 and 2023. Amidst these shifts, the edtech landscape has witnessed a series of transitions, including Deloitte’s resignation as the statutory auditor for BYJU’S and Aakash, and the appointment of BDO (MSKA & Associates) as the new statutory auditor.

As the situation unfolds, the AESL board’s concerted efforts to reshape governance and financial oversight aim to establish a robust foundation for the edtech ecosystem. Amidst mounting losses, layoffs, and the overarching impact of the pandemic-led edtech boom, the road ahead promises to be a crucial chapter for Aakash and its strategic partner BYJU’S.

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