The Karnataka High Court has ruled that Franklin Templeton Mutual Fund will require approval from its unit holders before winding up its six schemes.
According to the order, trustees of FT MF cannot take any action on the winding up of the six schemes till a simple majority consent of unit holders is obtained.
However, the voting will not happen anytime soon. As the Supreme Court is on vacation, the operation of the order has been stayed for six weeks to allow the fund house to appeal the order. Till then status quo on refund, redemptions should be maintained, ruled the Karnataka high court.
Following the court order, FT MF said that they are now considering the order and will take appropriate steps in consultation with their legal experts.
In April this year, FT decided to shut down its six debt schemes that had nearly 3 lakh investors and an AUM of Rs 26,000 crore.
