Franklin Templeton Mutual Fund can appeal to the Supreme Court on the Karnataka High Court order on the liquidation of the six debt schemes. In a letter to the investors of the six troubled debt schemes, Sanjay Sapre, president of Franklin Templeton Asset Management (India) wrote: “Although we are still in the process of studying the order, we based our initial review, we believe that it may be necessary to appeal aspects of the order in the Honorable Supreme Court “. The letter mentioned seeking appropriate court instructions to return excess cash ₹Rs 5,200 crore received from four of the six investor debt schemes. “It will also be our effort to seek appropriate court instructions regarding the return of excess cash. ₹5,200 crore currently accrued in the four positive cash schemes, and in respect of any additional cash we may receive while the matter remains under the consideration of the Hon’ble Court, “the note said.
Karnataka’s high court ruled on Saturday that Franklin Templeton India’s decision to liquidate its set of six debt schemes required simple majority shareholder consent.
The court ordered that the trustees should not take any action on the liquidation of the six schemes until the consent of a simple majority of shareholders is obtained. This means that for any other liquidation action, they would need the consent of the unitholders.
However, considering that the Supreme Court is on vacation, the operation of the order has been suspended for six weeks to give Franklin Templeton India time to appeal the order. Until then, the status quo on refunds, refunds should be maintained, the Karnataka high court ruled.
Earlier this year, in April, Franklin Templeton Mutual Fund decided to liquidate its six schemes, namely Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunities Fund accumulating assets for value ₹26,000 crore then.
Aggravated by this decision, some investors moved the courts in June.
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