SC asks Franklin Templeton to hold meeting with investors

SC agreed to hear an appeal filed by Franklin Templeton against the Karnataka HC order which stopped the fund house from winding up its debt fund schemes without prior consent of the investors

New Delhi: The Supreme Court on Thursday asked Franklin Templeton Mutual Fund to initiate steps within one week for calling a meeting of unit holders to seek their consent for closure of six mutual fund scheme and said there will be no redemption of units by investors till further orders.

The top court also agreed to hear an appeal filed by Franklin Templeton against the Karnataka High Court order which stopped the fund house from winding up its debt fund schemes without prior consent of the investors.

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A bench of Justices S Abdul Nazeer and Sanjiv Khanna observed that the issue is big and people wanted a refund.

It said that without prejudice to the rights of any party, trustees are allowed to call a meeting of unit holders to seek their consent for approval and in this regard steps be taken within a period of one week.

Advocate Pratap Venugopal, appearing for Securities and Exchange Board of India (SEBI), submitted that the market regulator has no role in the winding up process but had written to Reserve Bank of India in this regard.

The bench posted the matter for further hearing next week and directed that all cross appeals be placed on record.