Comments
Franklin Templeton has suspended the e-voting process seeking unit-holder’s approval to wind up the six debt schemes which had recently faced heavy redemption.
The development comes after the Gujarat High Court refused to provide any relief on its ad-interim stay order, issued on a case filed by a group of investors. The next hearing in the case is scheduled for June 12.
In a statement on Tuesday, Franklin Templeton said pursuant to the order on June 8 issued by the High Court, e-voting scheduled between June 9 and 11 and the unit-holder’s meeting on June 12, related to the schemes under winding up, stands suspended till further notice.
In fact, many investors are filing a series of cases against the troubled fund house for abruptly suspending redemption and purchase in the six debt schemes.
Legal action
On Monday, an investor moved the Delhi High Court seeking relief, while a public interest litigation was filed by the Chennai Financial Markets Accountability in the Madras High Court. So far, three cases have been filed against the fund house in different Courts. The Delhi High Court has issued notices to the trustees of Franklin Templeton and market regulator SEBI. The US-based parent of Franklin Templeton and Union government have also been added as party in the case.
“The trustees have failed to make prudent investments and faulted in proper administration of the fund. Franklin Templeton has been falling short in following SEBI circulars on increasing transparency of investments. The fund invested in securities which were of low credit rating,” said the petition filed in the Delhi High Court.
The petitioner has also refuted the fund house claim that the outbreak of Covid pandemic as reason for sudden suspension of redemption in the six schemes, and it was the only option to preserve the value of investments.
SEBI has already initiated a forensic audit on the fund house’s accounts and outcome of this audit will lead to further action in winding of the scheme.
The suspension of the e-voting process will further delay the sale of investments made the six debt schemes and repay investors.
Comments
COMMENT NOW
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.