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While Franklin Templeton Mutual Fund (FTMF) has been rejoicing with unit-holders voting in favour of winding-up of the six debt schemes, the observer appointed to oversee the e-voting process has expressed several concerns about the entire process. The observer, Taruvai Subayya (TS) Krishnamurthy, former chief election commissioner, points to the grey areas he spotted during the e-voting process, pertaining to voting rights, voting period, and voting rules. The report also mentions that 115,000 of the total unitholders, or about 38%, have participated on an overall basis in the e-voting. .there were many grey areas in the procedure adopted, which raised doubts and apprehensions in the minds of investors. Even FTMF did not seem to have had a clear idea about the procedure to be followed. This seems to be mainly because an exercise of this type was done for the first time and there were no clear-cut guidelines in certain areas to be followed, the report says.
Franklin Templeton Mutual Fund (FTMF) has claimed that till 15 January this year, its six debt schemes under winding since April 2020, have received Rs13,789 crore from maturities and pre-payments. Meanwhile, without sharing any calculations, the Chennai Financial Markets and Accountability (CFMA) claimed that unitholders would lose as much as Rs16,000 crore out of their investment of Rs28,000 crore in these schemes.
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The e-voting of unit-holders of six debt schemes of Franklin Templeton Mutual Fund (FTMF), which started on 26th December and would conclude on 29 December 2020, appears to be turned into a farce by FTMF, especially when the market regulator has been playing the role of a mute spectator. The Securities and Exchange Board of India (SEBI) has appointed TS Krishnamurthy, former chief election commissioner (CEC) as observer for the e-voting process and issued a statement on 26th December when the e-voting process had commenced. This move came a day after the Chennai Financial Markets and Accountability (CFMA) moved an urgent application before the Supreme Court (SC) against SEBI for not appointing an observer for the e-voting.
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The Chennai Financial Markets and Accountability (CFMA), an investor group, has asked investors of Franklin Templeton Mutual Fund (FTMF) to vote against the proposal by Franklin Templeton Trustee Services Pvt Ltd (Trustee) to wind up six debt schemes.
In its bulletin, CFMA says, We have consistently felt that FTMF took a unilateral decision to wind up six schemes to avert inevitable default and consequent regulatory actions against the fund managers and trustees. FTMF has front-ended the lie of COVID-19 excuse to conceal their bad, illegal, improper and risky investments made by their fund managers, whereas how come the Covid-19 reason has not been the case with any other scheme of FTMF or any other mutual fund?