Franklin Templeton AMC has notified that the e-voting process for winding up of six debt mutual fund schemes scheduled from June 9-11 stands suspended.
Franklin Templeton AMC has suspended the e-voting process to seek the approval of investors on winding up of six debt mutual fund schemes scheduled between June 9 and 11 stands. The move comes after the High Court of Gujarat dismissed Franklin Templeton’s application seeking vacation of the stay on the e-voting process granted by the court.
“Pursuant to the order dated 8th June 2020 issued by the Honourable High Court of Gujarat, the E-voting scheduled for 9 – 11 June 2020 and Unitholder’s Meeting on 12 June 2020, related to the schemes under winding up, stands suspended till further communication,” a Franklin Templeton spokesperson said.
Franklin Templeton Mutual Fund shut down its six debt mutual fund schemes – Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunities Fund – on April 24. These schemes cumulatively manages assets worth Rs 26,000 crore. Fore more, read:Â Franklin Templeton Mutual Fund winds up 6 debt schemes
The fund houses was scheduled to seek investor’s approval on winding up of these schemes between June 9 and 11. Franklin Templeton AMC has appointed Kotak Mahindra Bank as an independent advisor to monetise the six debt schemes.
In the earlier hearing, the petitioners had obtained the stay on the ground that the winding up of the debt schemes by Franklin Templeton was illegal. Franklin Templeton AMC moved an application before the High Court of Gujarat to vacate the stay.
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In the order passed on June 8th, the court said: “It has been rightly submitted by learned Senior Advocate Mr. Thakore that amidst the allegation of mismanagement of funds and fraud, the unit-holders would not be having the opportunity of informed decision making while casting the E-votes for the option given by the applicants. No winding-up process could be concluded without the consent of the unit-holders, as has been laid down in sub-regulation 15(c) of Regulation 18 of the Regulation. The Trustee shall have to obtain the prior consent of the unit-holders when a majority decide to windup or prematurely redeem the units. Thus, in view of the above provision of law, the interim injunction granted is confirmed till the forensic audit report comes in public domain.”
The court further said that, “In the result, the present civil application is dismissed.”
