NCLAT Refuses to Stay ₹2,500 Cr Class Action Suit Against Jindal Poly Films

The National Company Law Appellate Tribunal (NCLAT) has rejected a plea to stay a class action lawsuit against Jindal Poly Films Limited, upholding the National Company Law Tribunal’s (NCLT) earlier decision to admit the case. The suit, brought by shareholders holding a 4.99% stake, alleges that promoter-linked transactions between FY14 and FY22 caused a financial loss of ₹2,518.45 crore to the company and its public shareholders. These transactions include investments in group firms, trade advances, and the sale of a subsidiary’s stake at discounted values.

Jindal Poly Films argued that the transactions were completed in the past and therefore outside the scope of Section 245 of the Companies Act, 2013, which addresses acts prejudicial to shareholder interests. They also contended that the NCLT did not adequately assess the requirements for admitting the class action. However, the NCLAT noted investigations by SEBI and the Directorate of Enforcement suggest potential fraudulent acts and that the company’s affairs may have been conducted prejudicially.

The NCLT had previously found that the petitioners met the minimum threshold for bringing the suit and had acted in good faith. The NCLAT’s decision allows the case to proceed, with the NCLT set to begin hearing the matter. Jindal Poly Films maintains that all business decisions were made with commercial wisdom and proper approvals, and that the NCLAT’s decision does not address the merits of the case.

(Source：Outlook Business)