1 min read.Updated: 14 Jun 2021, 12:36 PM ISTNeil Borate
A simple majority (50%) of votes will determine if the winding up process stands approved or not. The fund house stated that votes not cast will be deemed to be votes in favour of winding up
Navi Mutual Fund, owned by Flipkart co-founder Sachin Bansal, on Monday announced the winding up of its arbitrage schemes due to its low assets (just ₹14.16 lakh as of 31 May, 2021).
The Navi Group had purchased the mutual fund business of the Essel Group in February this year and renamed it. The existing assets in the schemes are legacy assets from the previous owner. Navi has said it will focus on passive products such as index funds and ETFs rather than actively managed schemes and has filed papers with Sebi for a Nifty 50 Index Fund.
Unit holders of Navi Arbitrage Funds have to cast their vote over email, SMS or post by 17 July and the registrar and transfer agent for the fund house, KFintech will provide investors links for the same. Those who are voting by post can download the ballot form from the Navi Mutual Fund website.
A simple majority (50%) of votes will determine if the winding up process stands approved or not. Interestingly the fund house stated that votes not cast will be deemed to be votes in favour of winding up. The winding up provision for mutual fund schemes was in the eye of controversy with the shock winding up of six Franklin Templeton debt schemes in April 2020. The Supreme Court had ruled that investor consent is necessary for this process in relation to the Franklin winding up. However a ‘deemed consent’ provision as adopted by Navi can set a precedent for future winding up actions.