In October 2020, the Karnataka High Court has passed the order stating that no interference can be made in the decision of the trustees to wind up the six debt schemes of Franklin Templeton Mutual Fund (FT).However, the court had clarified that the consent of unit holders as per the regulations is to be obtained before going through the winding-up process.
Earlier, in April, Franklin had notified its investors that it was winding up the company’s low duration fund, the dynamic accrual fund, the credit risk fund, the short term income plan, the ultra-short bond fund, and the income opportunities fund, cumulatively worth nearly Rs 28,000 Crore.
Further, the company had cited lack of liquidity in the bond market due to the Covid-19 pandemic. Due to which, almost three lakh investors are set to be affected by the company’s wind-up decision.
After Hearing the matter, the Karnataka High Court was bound to dispose the matter within three months as per the Supreme Court’s direction. Hence, the order was pronounced on October 24.
Therefore, Franklin has moved the Supreme Court challenging the same.