Franklin Templeton Mutual Fund has suspended the electronic voting process to seek investors’ approval for winding up of six debt mutual fund schemes scheduled for June 9-11. The unitholders’ meet that was to be held on June 12 has also been deferred.

The move comes after the Gujarat High Court dismissed the fund house’s plea for vacating the stay granted by the court on the e-voting process and unitholders meet.

“Pursuant to the order dated 8th June 2020 issued by the Honourable High Court of Gujarat, the e-voting scheduled for 9-11 June 2020 and unitholders meeting on June 12, 2020, related to the schemes under winding up, stands suspended till further communication,” Franklin Templeton said in a statement.

On April 24, the fund house closed six of its debt funds, citing redemption pressures and lack of liquidity in the bond markets. These schemes were Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunities Fund.

All six schemes cumulatively manages assets worth up to Rs 26,000 crore.

Coming back to the e-voting, unitholders had to either vote in support or against the options offered by the fund house. The fund house had offered two options to affected investors, either monetisation of assets by trustees or hiring a third party to conduct the process.

Apart from these offers, investors also had an option to vote ‘no’ for either of the two proposals, but this would have delayed the monetisation of scheme assets.

Earlier, the Gujarat High Court had stayed the e-voting process for winding up of the fund house’s six debt schemes. The petition in the court was filed by investors alleging that winding up of the debt schemes by the fund house was illegal.

Following this, the fund house had filed a plea in the Gujarat High Court to stay the vacation.

Earlier, Madras High Court had issued notices to Franklin Templeton MF and market regulator Securities and Exchange Board of India (Sebi) after a petition was filed by an investors group, Chennai Financial Markets Accountability (CFMA), to safeguard nearly Rs 28,000 crore investor money stuck in six schemes.

The court took cognisance of the seriousness of the matter wherein the money of common public was at risk of getting wiped off and asked Sebi to file their reply, along with status report on the actions taken, as per the investors group.

The investors group had also said it is separately launching an online petition to bring together all affected investors and the same would be forwarded to the Prime Minister’s Office as well as the US parent of the fund house and the US market regulator Securities and Exchange Commission.