Comments
Franklin Templeton India plans to move the Supreme Court against the Karnataka High Court order making it mandatory to seek investors approval for winding up the six debt schemes even while upholding Trustees decision to close down the scheme.
In a note to investors, Sanjay Sapre, President, Franklin Templeton Asset Management (India) said on basis of initial review the fund house believes it may be necessary to appeal aspects of the order in the Supreme Court even while the fund house is still in the process of studying the order.
Related Stories
Franklin Templeton can’t wind up 6 MF schemes without consent from unitholders: Karnataka High Court
However, stays the operation of the verdict to enable FT to approach the apex courtIt will also be Franklin Templeton endeavor to seek appropriate directions from the court regarding return of cash of over Rs 5,200 crore currently accumulated in the four schemes and with regard to any additional cash that may be received while the matter remains under the consideration of the Court, he said.
Karnataka High Court judgement
The Karnataka High Court on Saturday issued its judgement on a petition filed by various investors in different parts of the country against closure of six debt schemes abruptly. Following the fund house moved the Supreme Court which directed the Karnataka High Court to hear the case on fast track.
Based on initial analysis of the order, Sapre said Regulation 39 to 42 of the SEBI (Mutual Funds) Regulations 1996, which deals with winding up of schemes have been held to be constitutionally valid.
The Court has also upheld the decision taken by the Trustee, to wind-up the schemes.
However, he said as per the judgement, consent of the unitholders will be required under regulation 18(15)(c) to operationalise the above decision.
The High Court has stayed the operation of its judgement for 6 weeks and the funds remain subject to winding up at this time.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.