New Delhi-based investors in the scrapped debt schemes of Franklin Templeton have filed a writ petition before Supreme Court after the fund house on Friday filed a petition before Gujarat High Court, urging it to vacate the stay on the company’s e-voting process.
New Delhi-based investors in the scrapped debt schemes of Franklin Templeton have filed a writ petition before Supreme Court after the fund house on Friday filed a petition before Gujarat High Court, urging it to vacate the stay on the company’s e-voting process. The Supreme Court is likely to hear the matter on Tuesday.
Seven Delhi-based investors, including Sanyam Jain, Sarika Mittal, Aakansha Maheshwari and Priya Meghnani, have urged the highest court to order a stay on the winding up of six debt fund schemes and the electronic voting process initiated by the fund manager from June 9. They also want the court to direct Sebi to appoint an administrator to take over the functioning of Franklin Templeton AMC and its trustee.
Investors alleged that the AMC closed six debt schemes without seeking unitholders’ approval.
“We are examining the matter and will take appropriate steps as may be required,” said Franklin Templeton spokesperson in an e-mail reply. “We continue to follow due process, both in making investment decisions and in the winding up of these schemes. We have acted in the best interest of our investors and in accordance with all regulations.”
The Gujarat High Court on Wednesday put on hold Franklin Templeton Mutual Fund’s electronic voting process for winding up of the six debt mutual fund schemes following a petition that the asset manager’s trustees did not seek unitholders’ consent before scrapping them. The case will be heard on June 12.
The petitioners were led by 83-year-old Areez Phirozsha Khambatta, one of the promoters of instant drink maker Rasna, who have invested Rs 6.55 crore into Franklin’s schemes.
Franklin had sent notices to unitholders announcing that the e-voting windows would open between June 9 and 11.
However, on Friday FTAMC moved to Gujarat HC to vacate the stay citing the stay would delay the repayment process.
“…. if the stay on the operation and implementation of the notice is not vacated at the earliest, the same would cause grave harm and prejudice to the more than 3 lakh unitholders of the schemes, including small/retail investors in these schemes by delaying realization and distribution of proceeds from the relevant schemes,” said the application filed by FTAMC.
In the application, the AMC said that Sebi is the nodal agency and market regulator, which is vested with extensive authority and jurisdiction to entertain complaints to investigate and take action. It also said that Sebi has already ordered a forensic audit in respect of the matter and the same is underway.
“That being the case, once Sebi completes its audit, it will decide upon the future course of action. The original petitioners cannot ask this court to conduct a parallel enquiry in respect of the same set of allegations.” FTAMC said in an application to vacate the stay order.
Also Read: Third case filed against Franklin Templeton Mutual Fund for shutting schemes
On April 23, Franklin Templeton had announced shutting down six debt schemes handling money worth Rs 25,856 crore. The fund house also put on hold redemptions indefinitely.
Last week, Madras High Court issued a notice to Sebi and sought a status report on the refund process after an investors’ association, Chennai Financial Markets Accountability (CFMA), moved the court against winding up of the six schemes.
