Franklin Templeton moves Supreme Court against Karnataka High Court order restraining winding up of debt schemes without investors' consent

Franklin Templeton Mutual Fund (FT) has moved the Supreme Court, challenging a Karnataka high court order which had restrained winding up of six of its debt schemes without obtaining the consent of its investors by a simple majority. .In October 202, the Karnataka High Court had held that no interference can be made in the decision of the trustees to wind up the six debt schemes of Franklin Templeton. 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..No interference in decision of Franklin Templeton trustees to wind up 6 debt schemes: Karnataka High Court; judgment stayed for 6 weeks .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, 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..Franklin Templeton case before the Karnataka High Court: A template for lengthy hearings via video conference?.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 as the reason for its decision..In June this year, the Supreme Court transferred the petitions filed on the issue from the Delhi, Gujarat and Madras High Courts to the Karnataka High Court..Franklin Templeton debt schemes: Karnataka HC to first hear pleas transferred from Delhi HC on August 12.As the High Court was bound to dispose of the matter within three months as per the apex court's direction, hearings were scheduled even on Saturdays as well as holidays by the High Court before it pronounced the verdict on October 24.