Karnataka HC restrains Franklin Templeton from winding up its six schemes without investors’ consent

By: |
October 25, 2020 5:18 PM

A Division bench of Chief Justice Abhay S Oka and Justice Ashok S Kinagi on Saturday passed the order while hearing a petition by the investors challenging Franklin Templeton's decision to wind up its schemes.

Franklin Templeton had contended that the winding up of the schemes was in accordance with the SEBI's guidelines.Franklin Templeton had contended that the winding up of the schemes was in accordance with the SEBI's guidelines.

The Karnataka High Court has stopped Franklin Templeton Investment from winding up its debt fund schemes without prior consent of the investors.

A Division bench of Chief Justice Abhay S Oka and Justice Ashok S Kinagi on Saturday passed the order while hearing a petition by the investors challenging Franklin Templeton’s decision to wind up its schemes.

The six schemes in question are: Franklin India Low Duration Fund, Franklin India Ultra Short Bond Fund, Franklin India Short Term Income Plan, Franklin India Credit Risk Fund, Franklin India Dynamic Accrual Fund and Franklin India Income Opportunities Fund.

Franklin Templeton had contended that the winding up of the schemes was in accordance with the SEBI’s guidelines.

However, the Court was not convinced and directed the investment company to seek the approval of the investors before moving forward with its decision.

“We hold and declare that the decision of the Franklin Templeton Trustee Services Private Limited to wind up six Schemes cannot be implemented unless the consent of the unit-holders is obtained,” the High Court observed.

The bench restrained the trustees from taking any further steps till consent of the unit-holders is obtained by a simple majority.

The court, however, maintained it was open to accepting the trustees obtaining consent of the unit-holders and taking further steps in accordance with the Mutual Funds Regulations.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Investors weigh prospects for US corporate earnings as stocks set records
2Paytm Money to facilitate investments in IPO, aims for 8-10% applications market share
3Bitcoin is winning the Covid-19 monetary revolution