The e-voting process adopted by Franklin Templeton to seek approval from unitholders to wind up six debt schemes had many "grey areas", according to a 14-page report by TS Krishnamurthy, the Securities and Exchange Board of India (SEBI)-appointed observer for the matter.
The report by Krishnamurthy, reviewed by DH, states that there were grey areas in the e-voting procedure which "raised doubts and apprehensions among the minds of unitholders".
The report also stated that that the unitholders of Franklin Templeton raised serious reservations over procedures adopted by the fund house. The fund house had used "green" colour for "yes" vote on winding-up and "red" for no.
In April last year, mutual fund investors owning up to Rs 26,000 crore were left in a lurch after Franklin Templeton, in an unprecedented move, decided to wind up as many as six high-risk mutual fund schemes.
Earlier, Franklin Templeton had said that over 96 per cent investors had voted in favour of the winding-up process that took place from December 26-28, 2020. “There were significant variations in e-voting process followed by FTMF vis-à-vis that prescribed under the Companies Act,” the report stated.
Each unitholder was given only one vote irrespective of the number of units held as on cut-off date and this is a deviation from the Company’s Act.
"The above procedure was alleged to create an impression that Franklin Templeton was actively canvassing the 'yes' vote," the report stated.
The report also stated that emails that were sent to 6,560 unitholders had bounced and SMS delivery to 1,766 unit-holders failed and their emails were unavailable. The email addresses of 10,548 unitholders were unavailable. Franklin Templeton had also warned unitholders in their notices about the consequences of voting "No".
Published 22 January 2021, 09:38 IST