RTI reply reveals Franklin Templeton did not seek Sebi approval before winding up 6 debt schemes: Report
The Khambatta family had said in its RTI plea that Franklin Templeton had claimed before the Gujarat High Court that necessary permissions for the winding up process had been taken from Sebi
August 26, 2020 / 09:39 PM IST
Franklin Templeton Headquarters (Image: Wikimedia Commons)
An RTI response has revealed that Franklin Templeton did not seek any approval from the Securities and Exchange Board of India (Sebi) before winding up its six debt schemes, Mint reported.
The right to information (RTI) plea was filed by the Khambatta family, promoter-director of Rasna and an investor in Franklin Templeton. In the RTI query, the family reportedly sought details regarding the date on which Sebi had granted permission for the winding up of the schemes, the date on which permission had been applied for and any evidence of the deliberation process.
The reply to this query, which was received in the first week of August, said that the markets regulator had not granted any such permission to Franklin Templeton.
The Khambatta family had said in its RTI plea that Franklin Templeton had claimed before the Gujarat High Court that necessary permissions for the winding up process had been taken from Sebi. A spokesperson for the company told Mint that no such statement was made before the HC or the Supreme Court.
On June 3, the Gujarat High Court issued a stay order on the Templeton's e-voting process to choose either its own trustees or Deloitte for the winding up process of the six debt schemes. The stay order was sought by Ahmedabad-based petitioner, Areez Khambatta, the second-generation owner of Rasna, the makers of the Rasna soft drink.
The petitioners had sought that Franklin Templeton's April 23 decision to wind up the schemes be set aside, contesting that the asset management company (AMC) had violated Sebi's mutual fund regulations and had not sought unitholders' approval before deciding to wind up.
On April 23, Franklin Templeton Mutual Fund had said it would wind up six schemes - Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunities Fund - citing severe illiquidity and redemption pressures caused by the COVID-19 pandemic.