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Franklin Templeton MF suspends e-vote process for closure of six debt schemes

The company has taken this move after the Gujarat High Court rejected Franklin Templeton's application seeking vacation on its ad-interim stay order on the e-voting process. The next hearing in the case is scheduled for June 12

twitter-logoBusinessToday.In | June 9, 2020 | Updated 18:15 IST
Franklin Templeton MF suspends e-vote process for closure of six debt schemes
Franklin Templeton Mutual Fund on April 23 said it would wind up six schemes

Franklin Templeton Mutual Fund has suspended the e-voting process for winding up its six debt schemes after the Gujarat High Court declined to vacate the stay on the process. The e-voting process for winding up of six debt mutual fund schemes was scheduled between June 9-11.

The company has taken this move after the Gujarat High Court rejected Franklin Templeton's application seeking vacation on its ad-interim stay order on the e-voting process. The next hearing in the case is scheduled for June 12.

On Monday, a bench comprising Justice Gita Gopi dismissed the plea of Franklin Templeton MF, which sought the lifting of the stay that was granted by the court on June 3 after a group of investors filed a petition in 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's e-vote was scheduled to be held from June 9 to June 11, while the unit holders' meet was slated to happen on June 12, 2020. Franklin had issued e-voting notices to 3 lakh investors who invested in the six debt schemes.

In a shocking move, Franklin Templeton Mutual Fund on April 23 said it would wind up six 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 - in wake of liquidity crisis and redemption pressures caused by the COVID-19 pandemic. The move resulted in locking in investor wealth worth Rs 30,800 crore.

The American fund house has appointed Kotak Mahindra Bank to monitor the winding up process of the 6 schemes it closed on April 23.

On June 3, the Gujarat High Court had put a stay on the e-voting process while hearing a case filed by Rasna India's founder Areez Khambatta, his wife Persis Khambatta and a trust promoted by them. The petitioners had alleged that the liquidation of the debt schemes was illegal as it needed to first obtain consent of unit holders before winding up or prematurely redeeming units of a scheme. 83 year-old Khambatta, his wife Persis Khambatta and Khambatta family trust had collectively invested around Rs 6.5 crore in mutual fund schemes floated by the asset manager.

Also Read: Coronavirus crisis: India sees biggest spike of 9,887 new cases, 331 deaths; tally rises to 2.66 lakh

Also Read: One-third of people in hotspots may have infected, recovered from COVID-19: ICMR report

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