Sebi appoints former CEC as observer to oversee e-voting for closure of Franklin Templeton’s six schemes

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Sebi appoints former CEC as observer to oversee e-voting for closure of Franklin Templeton's six schemes


Securities and Exchange Board of India (Sebi) on Saturday appointed former chief election commissioner of India T S Krishnamurthy as an observer to oversee the e-voting process for unit holders that will decide the fate of Franklin Templeton Mutual Fund‘s six debt schemes.

On December 9, the Supreme Court had directed Sebi to appoint an observer to monitor the voting, which started on Saturday and will close on December 29. The e-voting will end on December 28th.

The apex court had also directed that the result of the e-voting should not be announced but should be produced before it in a sealed cover along with the report of the Sebi appointed observer.

The regulator has constituted a technical assistance team to assist the observer.

The four member team consists of B N Sahoo, chief general manager,Sebi; Nayana Ovalekar, COO, CDSL; K Sriram, practising company secretary and scrutiniser and M Krishna and Ch E Sai Prasad, assistant directors of Central Forensic Science Laboratory, Hyderabad.

In April, Franklin Templeton Mutual fund had closed six debt mutual fund schemes handling a total of Rs26,000 crore of investor money citing redemption pressure and lack of liquidity in corporate bond market.

Since then, it had received total cash flow of over Rs 11,000 crore from maturities and pre- payments and interest payments.

The fate of these products will depend on the outcome of the vote. If majority of the unitholders vote in favour of winding up the schemes, Franklin would be able to return the money with the least disruptions, said investment advisors.

Chennai Financial Markets and Accountability( CFMA) had moved an application in the Supreme Court alleging that despite its order, the regulator has taken no apparent steps to appoint an observer.

“The concern of CFMA is, though the aforesaid order was passed on the 9th of this month, there has been no apparent steps taken by SEBI to appoint an observer. The voting is scheduled to commence from tomorrow (December 26) and there is no update about who the observer is, or his/her e-mail id, contact information, etc,” CFMA said in a press statement.





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