STOCK MARKET BSE NSE

Majority unitholders’ consent must to shut MF schemes: SC

However, it said that the requirement for consent of a majority of shareholders will be posting the publication of notices.

Published: 15th July 2021 10:58 AM  |   Last Updated: 15th July 2021 10:58 AM   |  A+A-

Supreme Court

Supreme Court (File Photo| EPS)

By Express News Service

NEW DELHI:  The Supreme Court on Wednesday has ruled that consent of unitholders is mandatory when winding up schemes of a mutual fund. The top court has agreed with the views of the High Court. However, it said that the requirement for consent of a majority of shareholders will be posting the publication of notices.

The court further stated that it has upheld the validity of the regulations, and while doing so, they have held that in case of trustees wrongfully seek winding up, SEBI will have the power to intervene in the same.

“We hold that the consent of the unitholders, as envisaged under clause (c) to Regulation 18(15), is not required before publication of the notices under Regulation 39(3). Consent of the unitholders should be sought post-publication of the notice and disclosure of the reasons for winding up under Regulation 39(3),” said the order by Justices Abdul S Nazeer and Sanjeev Khanna.

The court had also approved the application filed by SBI Mutual Fund and SBI Funds Management Pvt Ltd for placing on record the distribution mechanism proposed to be followed while distributing Franklin Templeton’s Rs 9,122 crore amongst its unitholders, under the six mutual fund schemes.

The application has followed the top court’s last order whereby it had directed SBI Mutual Funds to undertake the distribution, dividing the amount amongst unitholders, in proportion to their respective interest in assets of the scheme, as agreed by both Franklin Templeton Trust and SEBI.



Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp