Franklin Templeton trustees call EGM to consider indemnity for directors

(FT) Trustee Services has called for an extra-ordinary general meeting (EGM) on Thursday, where a resolution will be considered to grant indemnity to the directors of the trustee company, in relation to any liability, which might arise due to decision to wind-up six debt schemes of FT Mutual Fund (MF).

The notice for the extra-ordinary general meeting read, “In accordance with the articles of association of Trustee Services (the Company), the Company shall indemnify all directors to the fullest extent permitted by such articles and applicable law, in connection with liability that any of them may incur in connection with the decision to wind-up six debt schemes of Mutual Fund.”

It is also being proposed to widen the scope of indemnity. This would include covering any liability that may result from regulatory actions, and would also be applicable in case of negligence, default, breach of duty of breach of trust by any person under this indemnity.

Further, this would include advancement or direct payment by the company of any “reasonably incurred legal or travel costs” borne by any person under the indemnity.

The notice pointed out the Articles of Association of the company (Franklin Templeton Trustee Services) offers indemnity cover to every director against liability in respect of matters which arise “from acts or omissions of such person in the ordinary course of discharging his or her authorised duties in good faith and in company’s best interest”.

Recently, the Securities and Exchange Board of India (Sebi) has ordered an audit of the six schemes under wind-up by FT MF.

On Tuesday, filed a letter patent appeal (LPA) in Gujarat HC, which is an appeal filed to seek remedy from order of a single-judge bench. After an LPA is allowed, a matter can be heard before a larger bench in the same court.

Meanwhile, the fund house has appealed to Supreme Court to hear matter pertaining to Gujarat High Court’s (HC) stay order on the e-voting process. The HC had ordered that the stay will be in force till the findings of forensic audit are made public.

The unitholders’ e-voting was scheduled on June 9. The e-voting process would have given unitholders of Franklin’s schemes options on the manner in which the wind-up process and scheme asset monetisation could be taken forward.