Minority shareholders in the Jindal Poly Films Ltd class action have raised serious concerns about the process that led to the dispute being referred to arbitration. According to a letter from minority shareholders seen by NDTV Profit, approximately 40,000 public shareholders were neither informed nor consulted before the dispute was referred to private arbitration, despite the case having already been admitted by the National Company Law Tribunal and upheld on appeal. The letter alleges that the sequence of stake acquisition, substitution and subsequent consent to arbitration "bears the unmistakable hallmarks of a pre-arranged strategy to defeat the class action." The company and Monet Securities are yet to respond to requests for comment on these allegations.
The Supreme Court has referred the dispute between minority shareholders and Jindal Poly Films Ltd to arbitration after both sides agreed to a consent order on 8 June. A vacation bench allowed the request on June 8, set aside the earlier tribunal orders, and disposed of the case without examining the underlying allegations. The top court appointed former Chief Justice Manindra Mohan Shrivastava as the sole arbitrator to adjudicate the dispute between the two parties. As per NDTV Profit, the arbitration proceedings will be conducted in Delhi, with the arbitrator asked to resolve the disputes expeditiously. The case was originally filed by minority shareholder Ankit Jain and his family members in March 2024, but took a dramatic turn when Jain sold his stake and sought to withdraw from the proceedings.
The case, which alleged siphoning of over ₹2,500 crore through undervalued transactions involving promoter-linked entities, was widely seen as a landmark test of India's class action framework under the Companies Act. As reported by Mint, the petition estimated the total loss to the company at more than ₹2,500 crore. According to the petition, Jindal Poly invested about ₹703.79 crore between 2013 and 2017 in group power companies Jindal Powertech and Jindal India Thermal Power through preference shares. The petitioners alleged that after these companies benefited from debt waivers exceeding ₹7,000 crore, the investments were subsequently transferred at undervalued prices to promoter-linked entities, resulting in substantial losses to public shareholders. The petition was brought by minority shareholders led by Ankit Jain, collectively holding 4.99% of Jindal Poly's equity, alleging that promoter-linked entities benefited from undervalued transfers of investments in Jindal Powertech and Jindal Thermal, loan write-offs and other related-party transactions that caused losses exceeding ₹2,500 crore to the company and public shareholders.
The dispute was originally initiated by minority shareholder Ankit Jain and his family members in March 2024, but took a dramatic turn when Jain sold his stake and sought to withdraw from the proceedings. As reported by Mint, Monet Securities Pvt. Ltd was subsequently substituted as the petitioner and later consented to the matter being referred to arbitration. The matter remained before the NCLT for nearly two years as the tribunal examined whether it satisfied the threshold requirements for a class action under Section 245. On 5 February 2026, the NCLT admitted the petition and issued notice, marking the first time an Indian company tribunal formally allowed a corporate class action to proceed under the provision. The tribunal rulings had been viewed as pathbreaking because they expanded the scope of Section 245, holding that shareholders could challenge completed transactions and seek remedies benefiting the company itself. The admission was upheld by the National Company Law Appellate Tribunal later that month, and the proceedings expanded to include additional minority shareholders and an intervention by the Securities and Exchange Board of India, which had already identified alleged losses to public investors exceeding ₹760 crore.
According to Mint, the company stated that "as of date, the matter is under sub-judice. Therefore, no financial implications, if any, cannot be ascertained at this stage." The case had attracted significant attention because it was the first corporate class action petition to successfully cross the maintainability stage before the NCLT in India. Section 245 was introduced through the Companies Act, 2013, following the Satyam scandal, to strengthen minority shareholder protection and provide a mechanism for collective shareholder action. While class action remedies are widely used in jurisdictions such as the US, they have rarely been tested in India. The referral to arbitration now provides a structured framework for resolving the dispute while maintaining the landmark precedent established by the NCLT's initial admission, though it leaves unanswered several legal questions around the scope of minority shareholder remedies under Section 245. Legal experts say the development highlights a potential gap in India's class action architecture, where the law sets thresholds for filing such claims but offers limited guidance on how they may be settled or withdrawn after admission. Minority shareholders say they are evaluating their next steps, including possible legal remedies to challenge the arbitration referral or seek protection for the wider class.
