On Friday, the Apex Court directed transfer of all pleas related to Franklin Templeton India shutting down 6 of its debt schemes from various HC's in the country to the High Court of Karnataka within 2 weeks.

The Supreme Court in an oral order also directed the High Court of Karnataka to hear these cases within 3 months. It said that until the matter is decided by the Karnataka HC, the interim stay on the e-voting process for winding up the schemes will continue.

Paritosh R Gupta of Gupta Law Associates, counsel for one of the petitioners said that “The SC ordered that all the petitions pertaining to Franklin Templeton pending in various high courts may be transferred & heard by Karnataka High Court & the apex court also refused to stay the Gujarat high court order that stayed the e-voting process of winding up the debt schemes".

Earlier this month, the High Court of Gujarat had put on hold Franklin Templeton MF’s e-voting process for winding up of the 6 mutual fund schemes. Franklin Templeton had filed a plea in Apex Court challenging the stay granted by Gujarat HC on the e-voting process.

Apart from this, the Delhi & Madras HC's have sought response from Franklin & the Securities & Exchange Board of India (SEBI) on pleas against winding up of the schemes. Franklin is yet to file a reply in any of these cases in the HC's.

Franklin Templeton, India’s ninth-largest fund house, had in April notified its investors that it was winding up Franklin India low duration fund, dynamic accrual fund, credit risk fund, short term income plan, ultra-short bond fund & income opportunities fund worth nearly Rs 28,000 crore from April 24.

The decision, Templeton had then said, was to “protect value for investors via a managed sale of the portfolio, amid the severe market dislocation & illiquidity caused by the COVID-19 pandemic”.

The fund management group had later sent a link for e-voting, which investors allege did not have the option for them to reject the authorisation for winding up. The group had earlier in May said that voting for ‘negative’ on authorisation to wind up the scheme would not mean that the schemes would recommence the redemption & subscription process.

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