The National Company Law Tribunal (NCLT) has admitted a class action lawsuit against Jindal Poly Films. Minority shareholders allege the company divested valuable assets at undervalued prices to a promoter-linked entity, seeking ₹2,500 crore in damages. The tribunal overruled objections, marking a significant step for shareholder rights in India where such suits are rare.
NCLT Overrules Objections, Admits Class Action Against Jindal Poly Films
The National Company Law Tribunal (NCLT) has allowed a class action lawsuit to proceed against Jindal Poly Films, dismissing objections raised by the company's promoters and management regarding its maintainability. The ruling, made on Thursday, represents a critical development for minority shareholder rights in India, where such collective legal actions are seldom seen.
A group of minority shareholders, spearheaded by Ankit Jain, claims that Jindal Poly Films divested crucial investments, particularly in a power entity, at significantly undervalued or scrap rates. The lawsuit targets transactions with SSJ Trust, an entity reportedly linked to promoter Shyam Sunder Jindal, alleging these actions stripped the company of valuable assets and resulted in substantial monetary losses, amounting to ₹2,500 crore.
Precedent for Shareholder Rights and Ongoing Regulatory Scrutiny
This admission by the NCLT, which will now hear arguments on the merits of the case, sets a potentially wide-ranging precedent. It signals increased judicial willingness to entertain collective grievances from minority investors. The development comes shortly after it was reported that the Securities and Exchange Board of India (SEBI) was investigating Jindal Poly Films for potential violations of securities laws. The company had yet to respond to queries regarding these allegations.
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