Ankit Jain, the lead minority shareholder in India's first class action suit against Jindal Poly Films, is withdrawing from the landmark legal battle after selling his stake. According to reports from Mint, Jain's legal team informed the Delhi principal bench of the National Company Law Tribunal (NCLT) on Thursday that he had divested his entire shareholding and no longer had the legal standing to appear as a petitioner leading the class action. Jain previously represented a 4.99% minority stake alongside other petitioners when the case was filed in March 2024, alongside Rina Jain and Ruchi Jain Hanasoge who held a combined 4.99% stake in the company.
The petition alleges that more than ₹2,500 crore was siphoned from Jindal Poly Films through undervalued asset sales and related-party transactions involving promoter-linked entities. As reported by Mint, the case involves Jindal Poly's investments of approximately ₹703.79 crore between 2013 and 2017 in group power companies Jindal Powertech and Jindal India Thermal Power through preference shares. The petition states that these companies secured debt waivers of more than ₹7,000 crore in FY21, which improved their valuations before being sold at deeply undervalued prices to promoter-linked entities. According to the petition, "the loss caused to the company by the sale of OCPS and RPS is estimated at ₹2,518.45 crore, with the corresponding benefit accruing to the promoter entities."
The case was heard for nearly two years before the Delhi bench of the NCLT admitted it on 5 February, marking the first time an Indian tribunal formally issued notice in a class action under Section 245. According to Mint, the order was subsequently upheld by the NCLAT on 26 February, raising the stakes for the proceedings. The tribunal has now scheduled the next hearing for 30 April to examine whether a new shareholder can step in as a petitioner and whether the substitution is legally permissible. The tribunal was informed that a new shareholder was willing to step in as a petitioner in place of Jain, with the NCLT seeking responses from other parties on whether they had any objection to such substitution.
This case represents India's first corporate class action suit under Section 245 of the Companies Act, 2013, which allows group shareholders to file single cases if they believe a company is acting unfairly. As reported by Mint, shareholders holding at least 2% in a listed company can jointly seek action for fraud, mismanagement or wrongful conduct. The provision was introduced in 2013, following the Satyam scandal, to better protect minority shareholders. The case is being closely watched by minority investors and corporate boardrooms as its outcome could set a precedent for shareholder activism in India, where class action provisions have rarely been tested unlike jurisdictions such as the US.
Jindal Poly has maintained that the class action petition is not maintainable and that such provisions cannot be used as a substitute for other legal remedies requiring higher shareholding thresholds. According to Mint, the company has argued that the issues raised relate to governance concerns, which should have been pursued through alternative legal routes. The tribunal will now examine whether allowing a new shareholder to join midway through proceedings is legally permissible, adding uncertainty to the landmark case. The company's position that the petition is not maintainable creates a significant legal hurdle for the case to proceed.
