Global Indian Schools Holdings, which runs a string of schools in various Asian countries, including India, has sued private equity firm Baring Private Equity Asia over allegedly conspiring to prevent the educational services provider from expanding through acquisitions as part of a plan to seize control of the firm.
The education provider has filed a lawsuit against the PE firm in Singapore High Court.
Baring PE Asia is being represented by law firm Drew & Napier LLC. Vikram Rajaram, the lawyer handling the case, refused to respond to VCCircle query on the matter as it is sub judice. Baring PE Asia spokesperson replied to an email query stating, “We believe the accusation is baseless and we will defend ourselves to the fullest extent possible in the appropriate forum.”
The news was first reported by Bloomberg citing court filings.
The PE firm had reportedly agreed to invest up to $100 million in four tranches in the education service provider through its investment vehicle Minerva Education Holdings Ltd. The investment was in the firm of convertible notes to help its regional expansion plans.
The investment was subject to Global Indian Schools meeting a 2012 profit target of $9.8 million and giving Minerva at least a 15 per cent yearly return on each convertible note. Minerva was to cut the conversion price if the profit target wasn’t met, which would have given it a larger equity stake.
The Singapore-headquartered Asian education services venture has reportedly alleged that the PE firm vetoed its proposed deals in Abu Dhabi, Kuwait and Vietnam which prevented Global Indian Schools from meeting profit targets and further attempting to reduce the price the investors would have to pay for the equity.
Global Indian Schools owns and manages schools in Singapore, India, Malaysia, Thailand and Japan. It was founded in 2002 by LM Singhvi, CS Dharmadhikari and Atul Temurnikar. Its key shareholders include Global Schools Foundation Ltd (Singapore), K12 Eduschools Holding Ltd and Baring Private Equity Asia.
Baring Private Equity Asia has been an active investor in India. Last year, the firm invested in the Indian arm of the French cement maker Lafarge. It also acquired a majority stake in technology provider Hexaware Technologies Ltd from promoter Atul Nishar and PE firm General Atlantic.
This comes as yet another tussle between a PE firm and its portfolio firm. In the past Bain Capital had locked horns with Lilliput Kidswear and Fourcee Infrastructure fell foul of its two PE investors India Equity Partners and General Atlantic. However, in these two cases the PE firms had hit the alarm button citing corporate governance issues. Lilliput, for one, had also counter accused the PE investors of trying to take control of the firm.