Aakash warns EY over conflict of interest in Byju's-AESL row

Aakash Educational Services (AESL) has accused EY of conflict of interest and breach of professional conduct in its ongoing dispute involving Byju's. It has also asked EY to disclose all documents, information, or communication it was privy to, in relation to transactions involving AESL.

The broader legal fight centres around the governance and control of AESL following the failed acquisition by Byju's -- which has been reeling under charges of mismanagement, and alleged misuse of company funds.

Meanwhile, CrestLaw Partners, acting on behalf of Manipal Group (which holds significant stake in AESL), also approached EY flagging the firm's involvement in advising the Manipal Group in material matters involving tax and regulatory implications, accounting treatment among others, pertaining to AESL.

"We would further like to point out that, as majority shareholder in AESL, our client has been apprised that there are considerable correspondences in the records of AESL, which show that EY was a constant factor, in both operations and advise rendered to Mr. Byju Raveendran/Byju's/AESL/Aakash Choudhry/Blackstone/our clients, the Manipal group," it said on May 21.

It added, "Your association in any manner, through anyone, in the Corporate Insolvency Resolution Process, is a matter of considerable concern, regret and amounts to misconduct," CrestLaw Partners further said.

When reached for comments, EY said in a statement, "We refute all allegations. We treat matters of client confidentiality and conflict with utmost seriousness. Therefore, we cannot comment further on this matter".

Meanwhile, sources privy to the development said AESL's legal team -- in a strongly worded letter on May 17, 2025 -- accused EY of acting in a dual capacity, advising both Byju's and AESL, despite being fully aware of the hostile and litigated nature of their relationship.

AESL has termed this "unethical and legally untenable" and has moved to protect the integrity of ongoing legal proceedings.

According to charges levelled by AESL, EY allegedly provided services to Byju's while also interacting with AESL, something it labelled as a clear conflict in a case involving corporate control and shareholder disputes in AESL.

Also, despite being put on notice, EY continued to allegedly act in disregard of fiduciary boundaries, triggering legal response, AESL alleged.

AESL has demanded EY cease all involvement and preserve all communication records for potential use in legal proceedings.

In the letter to EY, AESL's legal head, Sanjay Garg made it clear that institutional integrity cannot be compromised, especially when it comes to firm's entrusted with sensitive, high-stakes advisory roles.

"We have sufficient material in our possession to submit before any adjudicating/regulatory authority to suggest that any involvement in the CIRP process would conflict with independent professional functions to be performed by entities such as you," said the letter.

The communication has put EY on notice that on their failure to confirm and provide the requisite information, appropriate steps in law would be taken against them, sources added.

"We would be constrained to take appropriate steps if you do not appreciate the seriousness of the point made by us that EY was an advisor as well as participant in many of the decisions," AESL said in the letter to EY.