Bengaluru: A southern Indian court has restrained Franklin Templeton Mutual Fund from winding up some of its debt funds without obtaining the consent of investors.
The board of the mutual fund cannot implement the “decision to wind up” as they are bound to obtain consent of the unit holders, said advocate Abhinav Shrivastava, a partner at law firm GSL Chambers, which represented one of the investors, citing the Karnataka High Court orders. “There is restraint on the trustees and the asset management company from taking any further steps.”
Franklin shut six of its fixed-income and credit-risk funds run by its Indian unit in April, locking in 308 billion rupees ($4.2 billion) of investor monies, after a liquidity crisis compelled the firm to freeze investor withdrawals in the South Asian nation.
“We are considering the order and will take appropriate steps in consultation with our legal experts in the best interest of the unit holders,” Franklin Templeton’s spokesperson said. – Bloomberg
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