MUMBAI: The Supreme Court on Friday decided not to intervene in various petitions filed in the case related to Franklin Templeton India shutting down six of its debt schemes.
In an oral order, the top court ruled that cases being heard in various high courts--in Gujarat, Delhi, and Madras--will be transferred to the Karnataka high court within two weeks.
It said hearing in the matter must be completed within three months and pending that the interim stay on the unitholders' e-voting process, as ordered by the Gujarat high court, will continue.
The final order is yet to be uploaded.
"The Supreme Court said that all the matters should be transferred to divisional bench of Karnataka high court for a fresh hearing. The transfer needs to happen within two weeks and the matter to be heard and decided within 3 months. The court also refused to interfere with the interim order," said Paritosh R Gupta, of Gupta Law Associates, counsel for petitioners, Khambatta family (promoter director of Rasna).
The top court order will ensure that the matter is heard afresh.
Franklin Templeton had filed a petition in Supreme Court challenging the stay granted by Gujarat high court on the e-voting process.
The e-voting process is a requirement under Securities and Exchange Board of India (Sebi) norms on winding up of mutual fund schemes. The voting would have authorised either the trustees of Franklin or Deloitte to monetise underlying assets for the winding up process.
The stay was granted on 3 June and a plea to vacate the stay by Franklin was rejected on 8 June. This deferred the timeline of the entire winding up process as the e-voting was to begin on 9 June.
On 23 April, Franklin Templeton had announced winding up six debt schemes citing severe liquidity and redemption pressures.
In its plea in Supreme Court, Franklin had argued it was critical that the unitholders’ meeting and e-voting be allowed to proceed in accordance with the mutual fund regulations to ensure small investors are paid at the earliest. It had added that the stay was delaying the return of monies to unitholders of the schemes causing them hardships.
Separately, Sebi had filed a plea against the Gujarat high court stay order and on interpretation of winding up rules which was heard today. The matter has now been posted to Tuesday, till such time these cases are not transferred to Karnataka high court.