NCLT To Hear Shareholders' Petition Against Jindal Poly Films Over 'Mismanagement'
The shareholders have alleged undervalued asset sales by Jindal Poly, causing significant harm to the company and them.
A class-action petition has been filed by the shareholders of Jindal Poly Films Ltd., alleging mismanagement prejudicial to the company and them.
They are seeking compensation of approximately Rs 2,800 crore. The National Company Law Tribunal has listed the matter for hearing on April 9.
A class-action suit is akin to a group effort when many people who have been affected or harmed by the same thing team up to take legal action together.
The shareholders have alleged financial mismanagement and undervalued asset sales by Jindal Poly, causing significant harm to the company and its shareholders.
Ankit Jain is leading the group of shareholders who have filed a class-action lawsuit. Their lawyers said in court that around 45,000 shareholders were impacted by this lawsuit. Together, these petitioners own 4.99% of the shares in Jindal Poly.
In the financial year 2013, Jindal Poly separated its investment division into a new company called Jindal Poly Investment and Finance Co. The demerged division consisted of 43.6 crore equity shares of Jindal Powertech, owned by Jindal Poly, valued at Rs. 305.4 crore, representing a 48.71% stake in Jindal Powertech, according to the petition.
The rationale behind this demerger was to enable Jindal Poly to focus more on its manufacturing business, which is its core activity. Despite this restructuring, Jindal Poly continued investing in Jindal Powertech, resulting in substantial investments totaling Rs 703.8 crore over the following years, it said.
The terms of these investments were changed, leading to losses for Jindal Poly. Ultimately, these investments were written off due to sustained losses incurred by Jindal Powertech. Despite providing financial aid to Jindal Powertech and Jindal Thermal, which was the holding company of Jindal Powertech, Jindal Poly sold its investments in these companies at prices significantly lower than their actual value, the petition said.
This sale resulted in substantial losses for Jindal Poly and its shareholders. Attempts by shareholders to seek clarification from the company regarding these investments went unanswered, it said.
