SEBI appoints former chief election commissioner as observer for Franklin Templeton e-voting

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The Securities and Exchange Board of India (SEBI) has appointed Taruvai Subayya Krishnamurthy, the former chief election commissioner of India as the observer for e-voting on the winding-up of six schemes by Franklin Templeton Mutual Fund (MF).

Between December 26, 2020 and December 28, 2020, the unitholders of the six schemes will vote on whether the schemes should be wound-up or not.

This will also be first time when unitholders of six schemes get a chance to question trustees (in a meeting to be held on December 29) on their decision to wind-up the schemes. Unitholders can also vote during this meeting (each scheme meeting may last one to one-and-half hours), but only if they get on the video conference, which will have a cap of 2,000 attendees.

Earlier in the month, the Supreme Court (SC) had directed SEBI to appoint an observer for the e-voting.

Also Read: SC hearing: Franklin Templeton to take unitholders’ approval for winding up schemes

The result of these e-voting will not be announced immediately. The SC had directed that the result of the e-voting would need to be first produced before the court in a sealed cover, along with the report of the observer.

The unitholders’ voting started from 9 am on December 26, 2020 and will go on till 6 pm on December 28, 2020.

Also Read: Franklin Templeton unitholders vote: What should investors do?

Each unitholder will get one vote for the scheme he/she is exposed to. If the investments are jointly-held, the first unitholder will get the voting right.

As of December 15, 2020, the six schemes of Franklin Templeton MF have received total cash flows of Rs 11,907 crore from maturities, pre-payments and coupon payments since these scheme were shut for the winding-up process.

Franklin India Low Duration Fund, Franklin India Ultra Short Bond Fund, Franklin India Dynamic Accrual Fund and Franklin India Credit Risk Fund have 49 percent, 48 percent, 34 percent and 16 percent of their assets in cash.

Borrowing levels in Franklin India Short Term Income Plan and Franklin India Income Opportunities Fund are now down to one percent and 16 percent of their respective assets.