SC directs Franklin Templeton to disburse Rs 9,122 cr to unit holders

By Sarkaritel February 3, 2021 11:47

New Delhi, Feb 3  The Supreme Court on Tuesday directed Franklin Templeton to disburse a sum of Rs 9,122 crore to the unit holders of six mutual funds that were closed by the mutual fund house in April last year.

A bench comprising S. Abdul Nazeer and Sanjiv Khanna said that Rs 9,122 crore (the figures as on January 15, 2021) should be distributed among the unit holders in proportion to the respective interests in the assets of the scheme. The top court asked the SBI Mutual Fund to carry out the exercise of disbursement, after a counsel for all parties agreed to this arrangement.

Advocate Pratap Venugopal, representing the SEBI, contended before the bench that if SBI Mutual Fund are involved, then the process of disbursing the amount would be completed equitably within 12 to 18 months. The counsel representing Franklin Templeton Trusts Services Limited and Asset Management Company Limited agreed to fully cooperate with SBI Mutual Fund.

The top court added that the distribution of money to the unit holders should be completed within 20 days from Tuesday. The bench also allowed the parties to move applications in case of any difficulty in the overall process.

On January 25, the Supreme Court had said that it will first deal with the “contentious” issue of the objection to the e-voting process for winding up Franklin Templeton’s six mutual fund schemes, and of distribution of money to the unit holders.

The top court had orally observed that objections around e-voting is a contentious issue. It had scheduled the matter for hearing on February 1 after one of the lawyers cited a media report, which claimed that a group of investors of Franklin Templeton Mutual Fund (FTMF) have moved the top court with a plea to declare the recent e-voting conducted by the fund house as illegal.

The bench had noted: “We will first examine the question of objection to e-voting and disbursal of funds.”

The top court had earlier asked the Securities and Exchange Board of India (SEBI) to appoint an observer to oversee the e-voting process. The voting took place in the last week of December, and it was approved by the majority of the unit holders. The court had also directed that the SEBI should file a copy of the final forensic audit report before it in a sealed cover.

On January 18, the top court had granted three days for filing objections to the e-voting on the winding up of six mutual fund schemes of the fund house. The court had also asked the fund house counsel if an order could be passed to allow distribution of money to the unit holders.

By Sarkaritel February 3, 2021 11:47