New Delhi, November 24, 2020: The Franklin Templeton Mutual Fund has challenged a Karnataka high court order, according to which the decision to wind down six debt schemes required simple majority consent from unit investors before the Supreme Court.

The Karnataka High Court division bench of Chief Justice AS Oka and Justice Ashok S Kinagi held a special sitting on Saturday, October 24 in order to pronounce the verdict in petitions challenging the winding up of six debt fund schemes of the Fund House.

While the court said that it was not interfering with the decision to wind up the schemes, it said that FT has to take the consent of the unit holders before taking further steps on the basis of the decision.

TheKarnataka High Court had also pulled up the Securities and Exchange Board of India (SEBI) for failing to act promptly to sustain the confidence of the investors.

It was in April that Franklin Templeton announced its decision to wind up six debt funds citing low liquidity. Nearly three lakh investors are estimated to be affected by this decision.

It was after this decision that some investors moved various High Courts. Petitions across High courts were clubbed by the Supreme Court vide an order dated June 24 in the transfer petition filed by Franklin Templeton seeking consolidation of various petitions filed with respect to the winding up of debt funds.

Franklin has stated that in May 2020, the trustees had sought a vote by unit investors for validly undertaking an orderly sale of the debt securities held in the funds and return money to Unit investors. However, the process could not be completed.

News Courtesy:PIB | Hindu| DC | LE | LI | LO | IE | LL | PTI |ht | ET | UNI | DNA | FP | Jurist |IndToday|

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