Jindal Poly challenges NCLT class action suit order| India News
Jindal Poly Films is challenging an NCLT order that admitted a class action lawsuit filed by minority shareholders alleging asset stripping.Summary
Jindal Poly Films has appealed to the National Company Law Appellate Tribunal (NCLAT) against the National Company Law Tribunal’s (NCLT) decision to admit a class action lawsuit brought by minority shareholders. The shareholders, holding 4.99% of the company’s shares, allege that Jindal Poly Films engaged in transactions that transferred valuable assets to promoter-linked entities at undervalued prices, resulting in losses exceeding ₹2,268 crore. They are seeking damages of ₹250.42 crore.
Jindal Poly Films argues that the lawsuit improperly utilizes the class action mechanism under Section 245 of the Companies Act, claiming the allegations constitute a derivative action or a case of oppression and mismanagement. The company maintains that the alleged harm was to the company itself, not individual shareholders, and therefore requires a different legal approach. However, the NCLT ruled that Section 245 allows shareholders to pursue collective action even when the harm is to the company.
The NCLAT has agreed to hear Jindal Poly Films’ appeal on Monday. Senior counsel Abhishek Manu Singhvi, representing Jindal Poly Films, stated that the NCLT’s order has already negatively impacted the company’s share price and affected approximately 45,000 shareholders.
(Source：Hindustan Times)