Jindal Poly on SEBI Radar: Regulator moves NCLT on investment write-offs in group company

Market regulator Securities and Exchange Board of India has moved the National Company Law Tribunal (NCLT) against Jindal Poly Films Ltd., flagging off preliminary investigation findings against the company on investments written-off in group companies.

SEBI claims that these investment write-offs caused losses to the tune of ₹760 crore and the same was not disclosed to investors, which is in violation of the regulations.

The regulator also informed the NCLT that it is in the process of initiating further action against Jindal Poly. A class action suit filed by minority investors against Jindal Poly is currently being heard by the NCLT.

SEBI had initiated investigations against the company after concerns were raised by minority investors. As per the findings, Jindal Poly invested in Jindal India Powertech, with investments being written off and, and this caused a loss of ₹760 crore to investors.

The investment write-offs, and disposal was done across multiple financial years, and the same did not reflect as a substantial loss in any single accounting period. This lack of transparency about interconnected transactions obscured material impact on shareholder value, and was in violation of the SEBI act and regulations, according to the findings.

SEBI also went on to state that the share price of Jindal Poly did not reflect the true extent of value erosion in Jindal Poly.

Shares of Jindal Poly are witnessing choppy moves in Friday's trading session, currently trading 1.4% higher at ₹531. The stock is down 5.5% in the last one month.