Markets regulator Sebi on Saturday said it had on December 18 appointed Taruvai Subayya Krishnamurthy as an observer to oversee the e-voting process for winding up of Franklin Templeton's six mutual fund schemes. On Friday, Chennai Financial Markets and Accountability (CFMA) said it has filed an application in the Supreme Court alleging that despite the apex court's December 9 order, no apparent steps have been taken by Sebi to appoint an observer in the matter.
The apex court had on December 9 asked the Securities and Exchange Board of India (SEBI) to appoint an observer for overseeing the e-voting process, scheduled between December 26-29. 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 had said.
In a statement issued on Saturday, Sebi said it has also constituted a technical assistance team that will assist the observer. Members of the team are — Chief General Manager of Sebi B.N Sahoo, Chief Operating Officer of Central Depository Services Ltd Nayana Ovalekar, company secretary and scrutiniser K. Sriram and assistant directors of Central Forensic Science Laboratory, Hyderabad M Krishna and Ch E Sai Prasad. The appointment was made after the Supreme Court's December 9 order which also said that the result of the e-voting would not be announced and would be produced before the apex court in a sealed cover along with the report of the observer.
"Accordingly, Sebi has appointed Shri Taruvai Subayya Krishnamurthy, the former Chief Election Commissioner of India as the Observer on December 18, 2020," Sebi said. The six schemes are Franklin India Low Duration Fund, Franklin India Ultra Short Bond Fund, Franklin India Short Term Income Plan, Franklin India Credit Risk Fund, Franklin India Dynamic Accrual Fund and Franklin India Income Opportunities Fund.
Franklin Templeton MF announced closure of these six debt mutual fund schemes on April 23, citing redemption pressure and lack of liquidity in the bond market.