Franklin Templeton MF has said it has postponed the proposed electronic voting process to decide on the closure of the six loan schemes. The voting was to be held from June 9 to June 11. Along with this, the virtual meeting of investors on June 12 has also been postponed. The Gujarat High Court had ordered a halt to e-voting and investors’ meeting and also rejected the fund house’s plea to reconsider the decision.
Postponement till further information
Franklin Templeton MF said in a statement, “By order of the June 8, 2020 order of the Gujarat High Court, the proposed e-voting on 9-11 June 2020 in relation to the discontinued schemes and the investors meeting to be held on 12 June 2020. Has been deferred until further information. The fund house had given two options to the affected investors during e-voting – either demonetisation of the property by the trustees or use third party services to complete the process. Apart from these offerings, investors also had the option to reject both these processes, but this would only delay the demonetization of assets.
Allegations: It is illegal to discontinue loan schemes
In this regard, the investors filed a petition in the Gujarat High Court alleging that it was illegal for the fund houses to discontinue the loan schemes. Hearing this petition, the Gujarat High Court had stayed the process of e-voting to discontinue the schemes. The company closed six loan schemes in April citing lack of cash in the bond market and pressure from investors to withdraw their funds.
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These schemes were – Franklin India Low Duration Fund, Franklin India Dynamic Acquired Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunity Fund. Around Rs 28,000 crore of investors are stranded in these schemes.