NCLAT reserves order on Jindal Poly's plea against admission of class action suit
NCLAT is considering Jindal Poly's appeal to halt a class action suit alleging fraudulent conduct by its promoters and management.Summary
The National Company Law Appellate Tribunal (NCLAT) has reserved its order on Jindal Poly Films Ltd’s appeal against the admission of India’s first corporate class action suit. The suit was filed by minority shareholders who allege fraudulent conduct by the company’s promoters and management, claiming over ₹2,500 crore was siphoned off through undervalued asset sales and related-party transactions. Jindal Poly seeks an urgent stay, arguing that proceeding with the suit would require notifying nearly 40,000 shareholders and could cause significant reputational and market harm. The National Company Law Tribunal (NCLT) previously admitted the petition, marking a first for corporate class actions under Section 245 of the Companies Act, 2013. Jindal Poly contends the suit is not maintainable and that the issues should be addressed through other statutory remedies. The case stems from investments made between 2013 and 2017 in group power companies and subsequent debt waivers, which shareholders claim led to undervalued sales to promoter-linked entities. The NCLAT’s decision will determine whether the class action proceeds, a case closely watched for its implications on minority shareholder rights in India.
(Source：Livemint)