The National Company Law Tribunal’s (NCLT) special bench on Thursday directed listing the class action lawsuit against Jindal Poly Films before the principal bench as such lawsuits can only be heard by the latter bench. The matter will be heard on May 7 and this will be India’s first class action lawsuit against a listed entity.
The case pertains to ₹2,500-crore fraud allegations raised by the company’s 45 minority shareholders holding a 5% stake. Three weeks ago, Ankit Jain – who led the group of minority investors – had informed the Tribunal that he sold his stake, therefore having no legal standing in the case. Meanwhile, another party had bought his shares and approached the NCLT, seeking to substitute its name instead of Jain.
Senior counsel for the Securities and Exchange Board of India (Sebi) also informed the Tribunal that Jindal Poly filed its reply to the regulator’s intervention application. By way of the application, the regulator had sought to bring on record its findings into the financial mismanagement and securities law violations by the company.
On Monday, the company had received a show-cause notice from Sebi “in relation to certain transactions and matters pertaining to disclosures and corporate governance.” Last year, the regulator had collected evidence about the company’s investment write-offs and general financial mismanagement which violated the rights of minority shareholders.