Manipal sends legal notice to EY over Aakash-Byju's audit dispute

BENGALURU: The Manipal Group issued a legal notice to EY India over a long-running dispute tied to the audit and advisory firm's role in the planned financial separation between Aakash Educational Services (AESL) and its acquirer Byju's, people familiar with the matter told TOI.

The notice, dated May 21 and sent by Manipal's legal counsel, was addressed to senior EY partners, including India chairman Rajiv Memani. It was issued on behalf of Manipal Health Systems and other entities forming the Manipal Group, which holds a significant stake in AESL and was at odds with Byju's over governance and financial issues in the test prep firm.

"We refute all allegations. We treat matters of client confidentiality and conflict with utmost seriousness. Therefore, we cannot comment further on this matter," an EY spokesperson told TOI in a statement. EY India was engaged to assist in preparing AESL's standalone financial statements for the fiscal year ended March 2023, amid discussions around a possible demerger from Byju's.

Manipal's move underscores the rising tensions between stakeholders in the Aakash-Byju's deal, once touted as India's largest edtech acquisition. Byju's acquired AESL for nearly $1 billion in 2021 in a cash-and-stock transaction but since faced mounting challenges, from delays in payouts to shareholder friction and attempts by investors to ring-fence AESL from the parent company's widening troubles. In 2023, Manipal Education and Medical Group chairman Ranjan Pai acquired the debt investment of Davidson Kempner in Aakash. The capital was loaned over shares of Aakash, which were offered as collateral.

The latest dispute adds another layer of complexity. The Manipal Group did not immediately respond to requests for comment.


Stay informed with the latest business news, updates on bank holidays and public holidays.

AI Masterclass for Students. Upskill Young Ones Today!– Join Now