Tag: e-voting

SC asks Franklin to disburse ₹9,000 crore to investors

Banking & Finance

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The Supreme Court on Tuesday ordered that ₹9,122 crore be disbursed within three weeks to the unitholders of Franklin Templeton’s six mutual fund schemes that are proposed to be wound up.

A Bench of Justices SA Nazeer and Sanjiv Khanna said the disbursal of money would be done in proportion to unitholders’ interest in the assets.

In the proceedings conducted through video conferencing, the Bench asked State Bank of India Mutual Fund to disburse the money as all the counsels gave consent to the court’s order.

The Bench granted liberty to the litigating parties to approach the court in case of any difficulty in the disbursal of money to the unitholders. The court also gave the parties liberty to move applications in case of any difficulty arising out of the process.

The lawyer, representing Franklin Templeton Trusts Services Limited, told the Bench that the company would render cooperation to SBI Mutual Fund.

A Franklin Templeton spokesperson said: “We are pleased that, as requested by us and in the best interests of unitholders, the court has directed the distribution of ₹9,122 crore (distributable surplus as of January 15, 2021) to unitholders. As previously stated, we went ahead with the difficult decision of winding up these schemes because of our firm belief that this was the right decision to preserve value for investors, as evidenced by the generation of cash in these schemes over the last 9 months.”

The Bench, had on January 25, said it would first deal with the issues related to objections to the e-voting process for winding up of the six mutual fund schemes and distribution of money to the unitholders. Prior to this, the apex court had granted three days for filing of objections to the e-voting on winding up of six mutual fund schemes of the company. It was also told by counsel for Franklin Templeton that an order be passed for allowing distribution of money to the unitholders.

E-voting process

Earlier, the apex court had asked the Securities and Exchange Board of India to appoint an observer for overseeing the e-voting process.

The voting on the winding up of Franklin Templeton’s six mutual fund schemes had taken place in the last week of December and was approved by the majority of unitholders.

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Franklin e-vote: Scrutiniser’s report raises more doubts on the process

Banking & Finance

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Raising further doubts over the ‘fairness’ of the e-voting process at Franklin Templeton Mutual Fund (FTMF), Mumbai law firm J Sagar Associates (JSA), which was appointed the ‘scrutiniser’, said it cannot vouch for the accuracy of the entire process.

JSA said in its report, seen by BusinessLine, that it relied on the voting data provided by KFin Tech, the company that provided the voting platform, and has not conducted any investigation or examination on its own into the data or the voting process.

“We have not investigated or verified the accuracy of the facts available and have not made any searches or any other independent investigation with any third party… we have not verified any information provided to us from any information which is either available in public domain or based on any other document,” JSA said in its disclosure.

Debt schemes

The e-voting was conducted during the last week of December after the Supreme Court asked FTMF to seek investor consent to wind-up the six debt schemes. While Franklin said that over 90 per cent of the votes was in favour of shutting down the schemes, several questions have been raised by the SEBI-appointed observer. Now, the disclosures by JSA have raised more doubts over the e-voting process.

On the question of possible duplication in the e-voting, the JSA report said, “The process was conducted by KFin online and J Sagar had no access to the details of the voting prior to the unlocking of the results. We will, therefore, be unable to make such a representation in the report.”

‘No technical error’

On the question of whether the e-voting was conducted without any technical glitches, JSA said, “We are not qualified to opine on the technical glitches. We understand from KFin that to the best of ‘their knowledge’ there was no technical error in the e-voting.”

KFin Tech provided the platform for e-voting and its role is already under scanner. On January 24, BusinessLine had reported that a forensic audit by the Central Forensic and Science Laboratory, which functions under the Home Ministry, disclosed that multiple votes were cast from the IP belonging to the servers of KFin Tech.

According to the Companies Act and guidelines of the Ministry of Corporate Affairs, a scrutiniser should ensure ‘fairness’ in the e-voting process.

JSA said in its report that its role was limited to the counting of votes after they were downloaded from KFin online portal.

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