Franklin Templeton suspends e-voting after Gujarat HC dismisses plea

By: |
June 10, 2020 1:45 AM

In April, the fund house had closed six debt schemes due to significantly reduced liquidity in the Indian bond markets for most debt securities and unprecedented levels of redemptions following the novel coronavirus outbreak and lockdown.

Franklin Templeton, Franklin Templeton suspends e-voting, Gujarat HC, Franklin Templeton MF, latest news on Franklin Templeton MFThe move came after the High Court of Gujarat dismissed Franklin Templeton MF’s plea to vacate the relief granted by the court of June 3.

Franklin Templeton Mutual Fund announced on Tuesday that it had decided to suspend e-voting and the unit holders meet till further notice. The move came after the High Court of Gujarat dismissed Franklin Templeton MF’s plea to vacate the relief granted by the court of June 3.

Franklin Templeton’s spokesperson said, “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 unit holder’s meeting on 12 June 2020, related to the schemes under winding up, stands suspended till further communication.”

In its order on June 8, 2020, High Court of Gujarat said, “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.”

In April, the fund house had closed six debt schemes due to significantly reduced liquidity in the Indian bond markets for most debt securities and unprecedented levels of redemptions following the novel coronavirus outbreak and lockdown. Later in May 28, the fund house had announced an electronic voting process and unit holders meeting for the same. Voting was scheduled to take place between June 9 and 11, 2020, and the unit holder meet was scheduled for June 12, 2020.

The High Court of Gujarat on June 3 had stayed e-voting and unit holder’s meeting for winding up six debt schemes closed by Franklin Templeton MF. The petitioner in the case were Areez Phirozsha Khambatta, Persis Khambatta and Khabhatta Family Trust. The petitioners have invested approximately Rs 6.55 crore in the schemes of the fund house.

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