Minority shareholders file suit against promoters of Jindal Poly Films

Minority shareholders of Jindal Poly Films have initiated a class action suit against the management and promoters of the company before the National Company Law Tribunal (NCLT) alleging loss due to their actions.

The petitioners, which collectively hold a 4.99 per cent shareholding in Jindal Poly Films, a manufacturer of speciality films, have alleged "oppression and mismanagement" against them and have sought damages from the company.

The petition filed under section 245 of the Companies Act, alleged that the sale of optionally-convertible preference (OCPS) shares and redeemable preferences shares (RPS) held by the company in a subsidiary to its promoter entity SSJ Trust and other firms at depressed valuations had caused a loss to the company and should be declared null and void.

They have requested NCLT to declare the sale of OCPS and RPS to SSJ Trust (through its trustees Shyam Sunder Jindal and Subhadra Jindal) and Jindal Poly Investment as being null and void, and reverse the said transactions in the books of Jindal Poly Films.

They have also requested NCLT to direct the promoters and company officials involved in the management of the company to compensate Jindal Poly Films with respect to loss on sale of OCPS amounting to Rs 2,268.03 crore.

As an interim relief, they have sought a status quo regarding OCPS and RPS from the tribunal.

The matter was listed before the Delhi-based Principal bench of the NCLT, which after a brief hearing has put the matter to April 9 for the next hearing.

It has also alleged that the "write-off of loans" provided by Jindal Poly Films to Jindal Thermal resulted in devaluation of the securities of the company.

They have also alleged the sale of shares of Jindal Thermal held by Jindal Films to a promoter group entity in which majority shares are owned by a trust belonging to the promoter group of Jindal Poly Films.

Jindal Poly Films is a part of the USD 2 billion BC Jindal Group, which operates a wide range of products and solutions for more than 6 decades.

The group is involved in diverse businesses including Polyester & Polypropylene films, Power generation, Cold Rolled Steel Strips, Galvanized Sheets, etc.