NCLAT dismisses Jindal Poly Films’ plea challenging class action lawsuit
NCLAT upheld the decision to allow a class action lawsuit against Jindal Poly Films alleging fund siphoning, potentially resulting in a ₹2,000 crore loss.Summary
The National Company Law Appellate Tribunal (NCLAT) dismissed Jindal Poly Films’ appeal to block a class action lawsuit filed by minority shareholders. The lawsuit alleges that funds were siphoned off to promoter-linked entities between FY13 and FY17, causing an estimated ₹2,000 crore loss to the company. Specifically, shareholders claim Jindal Poly Films invested ₹700 crore in Jindal Powertech and Jindal Thermal, wrote off these investments, and then invested an additional ₹600 crore to facilitate debt settlements. Subsequently, the company allegedly sold its shares in these entities for a significantly lower price (₹106 crore) after the power sector recovered. Jindal Poly Films maintains that all decisions were made with commercial wisdom and in compliance with applicable laws, and that the NCLAT’s decision does not address the merits of the case. Shares of Jindal Poly Films fell nearly 5% following the NCLAT ruling.
(Source：CNBC TV18)