The National Company Law Tribunal (NCLT) in Delhi will hear a class action suit brought by minority shareholders of Jindal Poly Films against the company and its promoters, alleging mismanagement of the company’s affairs and seeking damages of ₹2,800 crore against losses suffered by the company, on April 9.

The minority shareholder petitioners, who hold 4.99 per cent stake, have alleged that the sale of financial instruments held by the company in a subsidiary to its promoter entity SSJ Trust and other firms at squat valuations had caused a loss to the company and should be declared null and void.

The petitioners have also alleged a complex web of transactions and asset sales at low values devised by the company and its promoters to cause losses to it and the shareholders.

Demerging company

In FY13, Jindal Poly spun off its investment division into a separate company. This demerged company comprised huge number of shares of Jindal Powertech owned by Jindal Poly, and represented a substantial stake in Jindal Powertech, which was then transferred to Jindal Poly Investment.

While the demerger was done ostensibly to enable the company to focus on its core business of manufacturing poly films, the petition alleged that Jindal Poly had continued to invest in Jindal Powertech, amounting to ₹704 crore. A change in the terms of the investments led to losses for Jindal Poly, which had to write off its investment in Jindal Powertech.

Jindal Poly Films is part of the BC Jindal group that runs diverse businesses such as polyester and polypropylene films, power generation, cold rolled steel strips and galvanised sheets.

Related Topics
comment COMMENT NOW