The writ petition has been filed challenging the winding-up notice issued by the mutual fund to close its six debt funds. The petitioner, Amurta Garg, also challenged the SEBI’s Mutual Fund Regulations and sought refund of her money from Franklin Templeton.
As per the petitioner, the contention of the mutual fund house citing the present coronavirus pandemic for winding up the scheme and that it is the only viable option to preserve value for the unit-holders is “hogwash”.
The petitioner claims that the Trustees have failed to make prudent investments and faulted in proper administration of the Fund.
In April, Franklin Templeton India announced that it was closing six of its credit funds due to liquidity issues amid the coronavirus crisis.
The funds which have been shut are Low Duration Fund, Ultra Short Bond Fund, Short Term Income Plan, Credit Risk Fund, Dynamic Accrual Fund, Income Opportunities Fund.
“There has been a dramatic and sustained fall in liquidity in certain segments of the corporate bonds market on account ofthe Covid-19 crisis and the resultant lock-down of the Indian economy which was necessary to address the same,” it had said.
Franklin Templeton Trustee Services have appointed Kotak Mahindra Bank to assist in the monetisation of assets in the six schemes being wound-up.