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Franklin Templeton issues notice for e-voting for winding down of its 6 debt schemes

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The decision follows Karnataka High Court's ruling of holding the winding-down process of the schemes until unitholders gave their consent.

Franklin Templeton issues notice for e-voting for winding down of its 6 debt schemes

Franklin Templeton Mutual Funds has issued a notice to its investors to conduct e-voting on the winding up of six debt schemes held on April 23 due to redemption pressure. According to the notice, the unitholders have the option to choose between giving consent to the winding up of the schemes or letting them reopen.

The decision follows the Karnataka High Court's ruling of holding the winding-down process of the schemes until unitholders gave their consent.

Franklin Templeton had voluntarily decided to wind up its suite of six fixed-income funds on April 23, 2020, in light of severe market fluctuations and illiquidity caused by the COVID-19 pandemic.

The voting will start from 9 am on December 26 and continue till 6 pm on December 28, followed by a round of meetings on December 29. Separate sessions will be held with unitholders on December 29 for different schemes, while e-voting will continue alongside.

Here's how unitholders can vote:

  1. KFintech (formerly Karvy), the mutual fund registrar and transfer agent (RTA) will email the user name and password to the unitholders.
  2. Unitholders have to log in to evoting.kfintech.com to cast their vote.
  3. If the holders already have a user name and password, they can use the same to cast their vote.

The voting will follow the principle of one vote per holder.

Here's how to join meetings on December 29:

  1. Investors can use the same e-voting credentials to join the virtual meetings at emeetings.kfintech.com.
  2. Holders have to provide their folio number/DI ID/Client ID and mobile number to speak at the meeting.

In the notice, the trustees urged the unitholders to give their consent for winding-down of the schemes. It highlighted that if the schemes were to reopen "it would precipitate a rush of redemptions which would force a distress sale of portfolio securities likely resulting in a reduction in the net asset value of the scheme and substantial losses for the unitholders."

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