Gujarat HC stays Franklin Templeton's e-vote on winding up of six schemes
The Gujarat High Court on Wednesday stayed Franklin Templeton Mutual Fund's e-vote and unit holders meet for the six wound up schemes.
The Gujarat High Court on Wednesday stayed Franklin Templeton Mutual Fund's e-vote and unit holders meet for the six wound up schemes. The petitioners have alleged that the winding up of the debt schemes by Franklin Templeton was illegal. The next date in the matter is June 12.
In the order, the Gujarat High Court said that, "Considering the facts of the case, issue Notice, returnable on 12.06.2020. In the meantime, by way of ad-interim relief, the operation and implementation of the Notice dated 28.05.2020 regarding E-voting and Unit-holder's Meeting send through Email by respondent no.3 herein shall remain stayed. Direct service is permitted."
The petitioners had earlier argued that the winding up of the six debt mutual fund schemes was contrary to sub-clause 15(c) of Regulation-18 of the SEBI (Mutual Funds) Regulations. However, in this case, no such consent was obtained. They further argued that as per Regulation-39 of the Regulations, a scheme of a mutual fund may be wound up only after repayment of the amount due to the unit-holders, which has also not been followed in this case.
"It was contended by the learned senior counsel that the petitioners have invested a huge sum of approximately Rs.6,55,00,000/- in the schemes floated by the respondent-Asset Management Company, Franklin Templeton Asset Management (I) Private Ltd., the details of which have been provided in the petition," the order noted.
In the order, the Gujarat High Court said that, "Considering the facts of the case, issue Notice, returnable on 12.06.2020. In the meantime, by way of ad-interim relief, the operation and implementation of the Notice dated 28.05.2020 regarding E-voting and Unit-holder's Meeting send through Email by respondent no.3 herein shall remain stayed. Direct service is permitted."
The petitioners had earlier argued that the winding up of the six debt mutual fund schemes was contrary to sub-clause 15(c) of Regulation-18 of the SEBI (Mutual Funds) Regulations. However, in this case, no such consent was obtained. They further argued that as per Regulation-39 of the Regulations, a scheme of a mutual fund may be wound up only after repayment of the amount due to the unit-holders, which has also not been followed in this case.
"It was contended by the learned senior counsel that the petitioners have invested a huge sum of approximately Rs.6,55,00,000/- in the schemes floated by the respondent-Asset Management Company, Franklin Templeton Asset Management (I) Private Ltd., the details of which have been provided in the petition," the order noted.