On Saturday, The Karnataka High Court ruled that Franklin Templeton Mutual Fund will need to seek approval from unit holders before winding up six schemes with combined assets of some ₹ 28,000 crore ($3.8 billion).
The funds had large exposures to higher yielding, lower-rated credit securities. But some investors challenged the decision in court saying their permission should have been sought.
The High Court in Karnataka ruled on Saturday that, while not wanting to interfere with Franklin’s decision, it should seek consent of unit holders.
Franklin Templeton in response said in a statement the court had upheld the decision taken by its trustees to wind up the schemes, but had ordered that approval of the unit holders is required.
It said: “We are considering the order and will take appropriate steps in consultation with our legal experts in the best interest of the unit holders.”
The court has granted Franklin six weeks to appeal against the decision in the Supreme Court if it so wishes, local media reported.
