Supreme Court dismisses unitholders' objections to winding up of Franklin Templeton mutual funds schemes

The Supreme Court today passed an order dismissing the objections raised by unitholders of the six Franklin Templeton mutual fund schemes that were wound up last year..The Court also upheld the results of the e-voting. The disbursement of ₹9,122 crore to the unitholders will take place as earlier ordered by the Court..The Bench of Justice S Abdul Nazeer and Sanjiv Khanna passed today's order after earlier ordering the disbursement of funds through State Bank of India (SBI) Mutual Funds..The bench stated that for the purpose of clause (c) to Regulation 18(15), it held that consent of the unitholders would mean consent by majority of the unitholders who have participated in the poll, and not consent of majority of all the unitholders of the scheme.."In view of the findings and reasons stated above, we reject the objections to poll results and hold that the unitholders of the six schemes have given their consent by majority to windup the six schemes. Winding up and disbursements would be in terms of our directions in earlier orders dated 2nd February, 2021 and 9th February, 2021," the judgment said. .In a previous hearing, the Court had asked the Securities and Exchange Board of India (SEBI) to appoint an observer to oversee the e-voting process in relation to the Franklin Templeton debt schemes that were wound up this year.This, after the apex court agreed to hear a challenge to the Karnataka High Court verdict by which it was ordered that no interference can be made in the decision to wind up the six debt schemes of Franklin Templeton..On October 24, the Karnataka High Court had refused to interfere in the decision of the trustees to wind up the six debt schemes of Franklin Templeton. The Court, however, clarified that the consent of unit holders as per the regulations is to be obtained before going through the winding-up process..The appeal by Franklin Templeton was filed by Advocate Jasmeet Singh. .[Read Judgment]