The Delhi HC has issued notice to the Trustee and Asset Management Company of Franklin Templeton Mutual Fund and also to SEBI on a writ petition challenging the Winding Up notice issued by the Mutual Fund to close its 6 debt funds
The petition filed by Amruta Garg also challenges a consequent notice issued for E-voting. Challenge has also been made to SEBI's Mutual Fund Regulations. Petitioner has also prayed for refund of her money from Franklin Templeton. The U.S. parent of Franklin Templeton has also been added as a Party.
The Petitioner has stated that the contention of FT citing present COVID19 pandemic for these schemes to be wound up, and that this is the only viable option to preserve value for unitholders is a hogwash. Petitioner claims that the Trustees have failed to make prudent investments and faulted in proper administration of the Fund. FT has been falling short in following the Circulars of SEBI, which were for increasing transparency of investment, time and again. Also, the Fund invested in the securities which were of low credit rating.
The Court has also directed SEBI to ensure compliance of the Regulations and take action if it finds any substance in the audit (ordered by SEBI) which is already underway. Further, the petitioner has also been given the opportunity to submit further documents before SEBI against FT. All decision to be taken on winding up of the scheme would be subject to the outcome of the Writ Petition.
The Petition was filed by Mr. Abhinav Shrivastava, Partner GSL Chambers and Mr. Manish Yadav Advocate. Mr. Ravindra Shrivastava, Senior Advocate argued the case on behalf of Writ Petitioner. Mr. Tushar Mehta, Solicitor General, appeared for SEBI. Franklin Templeton was represented by Mr. C.A. Sundaram, Senior Advocate.
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