Jindal Poly Films has approached the National Company Law Appellate Tribunal (NCLAT) to challenge the National Company Law Tribunal’s (NCLT) admission of a rare class action lawsuit by the company’s minority shareholders. “The company has reviewed the order and basis legal advice filed appeal before NCLAT, which is expected to be listed on Monday” a spokesperson of the company said.
Allegations of Asset Stripping
The minority shareholder group holding 5% stake in the company alleged that the firm diverted funds to promoter-linked entities, unfairly wrote off loans given related companies, and sold assets for cheaper prices, among others, all leading to erosion of value for shareholders. More than ₹2,700 crore is alleged to be used for the afore-mentioned matters, as per the NCLT order dated Thursday.
Corporate Defense
The tribunal’s decision “does not have any implications or bearing on the merits of the case as the Hon’ble NCLT is yet to hear the matter,” the company said, adding that the matter “does not entail any findings on the allegations made in the petition”. It also said that the company’s business decisions were “executed under commercial wisdom with necessary approvals as required under applicable laws.” On Friday, shares of Jindal Poly recovered in the second half of the session and closed over 5% higher at ₹424.50 on the BSE.