Franklin Templeton debt schemes petitions: Karnataka HC issues notice to Centre, SEBI and Franklin Templeton group of companies

The Karnataka High Court today issued notice in a batch of petitions related to the winding up of Franklin Templeton Mutual Fund’s six debt schemes (Amruta Garg v. Union of India)..Formal notice was issued to the Central government, the Securities Exchange Board of India (SEBI) and the Franklin Templeton group of companies..On June 19, the Supreme Court had directed the transfer of all petitions related to the winding up of six Franklin Templeton India debt schemes from the High Courts of Delhi, Madras and Gujarat to the Karnataka High Court within 15 days..SC transfers all pleas challenging winding up of Franklin Templeton debt schemes to Karnataka HC, directs CJ to decide matter in 3 months.The Apex Court had further urged the Karnataka High Court Chief Justice to hear the matters himself, and dispose of the same within three months..After hearing the matter today, the Division Bench comprising Chief Justice Abhay Shreeniwas Oka and Justice Ashok S Kinagi directed all parties to file their responses by July 22. Rejoinders to the responses are to be filed by July 29..During the hearing, the Court noted that the matters filed before the Madras High Court had not yet been transferred to the Karnataka High Court in line with the Apex Court's direction. In this regard, the Bench directed the High Court Registrar to remind the Madras High Court Registry to transfer all such matters..For issuing directions in the Madras High Court petitions, the matter will be heard on July 15, the Bench informed. .In its order passed today, the Bench clarified that as per the Supreme Court order dated June 19, the High Court is empowered to hear only those matters that have been specifically transferred to it. If the parties want the Court to hear any other matter, they will have to approach the Supreme Court first, CJ Oka clarified. .Since the matters have to be decided within three months as per the Apex Court's direction, hearings will be taken up 2-3 times a week in the afternoon sessions (including Saturdays), CJ Oka said..In early June, the Apex Court had heard Franklin Templeton’s plea for consolidation of several petitions filed by investors before the High Courts of Madras, Delhi and Gujarat..During the hearing, the Supreme Court Bench had orally observed that it was incorrect on the part of the firm to wind up funds during the COVID-19 pandemic..Earlier in June, the Gujarat High Court had put on hold Franklin Templeton MF’s e-voting process for winding up of the six mutual fund schemes. .On June 13, the Delhi High Court had issued notice in a petition challenging Franklin Templeton Trustee Services' move to wind up its debt funds. (Amruta Garg vs UOI & Ors).Delhi HC notice in challenge to Franklin Templeton's move to wind up its debt funds; SEBI says it has initiated a forensic audit.Franklin Templeton, India’s ninth-largest fund house, had in April notified its investors that it was winding up the Franklin India low duration fund, dynamic accrual fund, credit risk fund, short term income plan, ultra-short bond fund and income opportunities fund, cumulatively worth nearly Rs 28,000 crore..Almost three lakh investors are set to be affected by Franklin Templeton’s decision to wind up its debt mutual fund schemes. The company had cited lack of liquidity in the bond market due to COVID-19 for its decision.