The Karnataka High Court on Wednesday issued formal notices to the Centre, the Securities Exchange Board of India and Franklin Templeton group companies on petitions challenging Franklin Templeton Mutual Fund’s plan to wind up six debt schemes, which were transferred to it from three different high courts.
The Supreme Court, in its June 19 order, had transferred the similar cases pending in the High Courts of Delhi, Gujarat and Madras to the High Court of Karnataka with a request to the Chief Justice to hear the matters himself in a division bench, and finally decide on the matters within three months.
A Division Bench asked all the parties to the litigations to file their responses by July 22 and rejoinders to the responses by July 29.
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Noticing that the records of the petitions in the High Court of Madras have not yet been received, the Bench issued direction to its Registrar (Judicial) to communicate with the Registrar-General of the High Court of Madras for immediate transfer of all records pertaining to the case.
While multiple petitions were filed before three High Courts on winding up of six debt schemes, the High Court of Gujarat, in the first week of June, had stayed the process of e-voting, which is the first step to get the unit holders’ nod to proceed with the winding up of schemes abruptly announced by the fund house in April this year. The e-voting window was scheduled to be open from June 9 to June 11.
In the earlier proceedings before the High Court of Delhi prior to transfer of the petition to Karnataka, the SEBI had told the High Court that a forensic audit has been ordered based on the complaint received on May 25, 2020 against the Franklin Templeton Trustee Services Pvt Ltd and another group company.
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The petitioners had questioned the legality of the process of winding up of the schemes involving thousands of crores of rupees while making various allegations, including that the fund house failed to adhere to many rules.