Franklin Templeton case: SEBI appoints former Chief Election Commissioner as observer for e-voting

Franklin Templeton case: SEBI appoints former Chief Election Commissioner as observer for e-voting

Former Chief Election Commissioner (CEC) of India – Taruvai Subayya Krishnamurthy has been appointed as the observer for e-voting on the winding-up of six schemes by Franklin Templeton Mutual Fund (MF) by Securities and Exchange Board of India (SEBI).

The unit-holders of the six schemes will vote between December 26, 2020 and December 28, 2020, as to whether the schemes should be wound-up or not.

For the first time, the unit-holders of the six schemes would be getting an opportunity to raise their queries to the trustees in a meeting which is scheduled to be held on December 29 on their decision to wind-up the schemes.

The unit-holders would also be voting 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. The SC had directed that the result of the e-voting would have to be first produced before the court in a sealed cover, along with the report of the observer.

The result of these e-voting will not be announced immediately.

Each unit-holder will get one vote for the scheme he/she is exposed to. If the investments are jointly-held, the first unit-holder 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%, 48%, 34% and 16% of their assets in cash.