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Mumbai: Minority shareholders of Jindal Poly Films have dragged the company and its board to court over alleged mismanagement. A case has been filed with the Delhi bench of the National Company Law Tribunal (NCLT), seeking Rs 2,800 crore in damages.
The petitioners argued that among other financial mismanagement issues, Jindal Poly Films had transferred certain assets to entities related to the promoters at lower valuations. These actions have resulted in substantial losses to them. Promoters Shyam Sunder Jindal, Subhadra Jindal and Bhavesh Jindal own about 75% of Jindal Poly Films, which has a market cap of Rs 2,256 crore.
The petition, perhaps a rare class action suit in India, is filed by a group of minority shareholders led by Ankit Jain. The group owns about 5% in Jindal Poly. According to rules, a class action suit can be filed by a group of shareholders holding at least 2% in a company.
Jain claimed in the NCLT that around 45,000 shareholders were impacted by the class action suit. Jindal Poly defended that the deals referred by Jain and others were past transactions and were approved by shareholders. The matter will be heard on April 9.
Seven years ago, minority shareholders of some Tata Group’s listed entities filed a case against the promoters over the erosion of investor wealth following the illegal removal of Cyrus Mistry from the chairman’s position. While the Bombay high court permitted the shareholders to file the case as a class action suit, it later revoked that order.
The petitioners argued that among other financial mismanagement issues, Jindal Poly Films had transferred certain assets to entities related to the promoters at lower valuations. These actions have resulted in substantial losses to them. Promoters Shyam Sunder Jindal, Subhadra Jindal and Bhavesh Jindal own about 75% of Jindal Poly Films, which has a market cap of Rs 2,256 crore.
The petition, perhaps a rare class action suit in India, is filed by a group of minority shareholders led by Ankit Jain. The group owns about 5% in Jindal Poly. According to rules, a class action suit can be filed by a group of shareholders holding at least 2% in a company.
Jain claimed in the NCLT that around 45,000 shareholders were impacted by the class action suit. Jindal Poly defended that the deals referred by Jain and others were past transactions and were approved by shareholders. The matter will be heard on April 9.
Seven years ago, minority shareholders of some Tata Group’s listed entities filed a case against the promoters over the erosion of investor wealth following the illegal removal of Cyrus Mistry from the chairman’s position. While the Bombay high court permitted the shareholders to file the case as a class action suit, it later revoked that order.
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