The Supreme Court has directed a stay on redemption requests from investors in the debt schemes wound up by Franklin Templeton. Furthermore, the court has permitted Franklin Templeton to call a meeting of unitholders to seek their consent and approval.
The Supreme Court also said that SEBI has a ‘lot to answer for’ and that they will have to take responsibility. The court said that SEBI could have allowed a moratorium of 60 days to Franklin Templeton, but allowed moratorium of only 10 days.
The court said that much of the confusion was caused due to SEBI’s ‘sketchy’ regulations, and asked the regulator’s counsel if its client was satisfied with the language of its norms which affect even the common man.
In its argument, Franklin Templeton’s counsel said that the asset management firm wanted to have a meeting with its unitholders, and that it would be able to prove that 95 percent of them would approve the winding up of the schemes.
Also, the FT counsel argued that no redemption should be allowed as it would cause a run on the schemes.
The Supreme Court will now hear Franklin Templeton and SEBI's plea next week.
CNBC-TV18’s Ashmit Kumar and Sumaira Abidi highlight some of the key takeaways from the case.