WINDING UP OF SCHEME :
A scheme should be wound up on the expiry of duration specified in the scheme or on the accomplishment ofthe objective of the scheme as specified in the offer document. A scheme may be wound up :
(a) on the happening of any event which, in the opinion of the trustee, requires the scheme to be wound up and the prior approval of SEBI is obtained; or
(b) if unit holders of a scheme holding at least three-fourth of the nominal value of the unit capital of the scheme, pass a resolution that the scheme be wound up and the approval of SEBI is obtained thereto; or
(c) if in the opinion of SEBI, the continuance of the scheme is prejudicial to the interests of the unit-holders; or
(d) if in the opinion of the CIMC, the purpose of the scheme cannot be accomplished and it obtains the approval of the trustees and that of the unit holders of the scheme holding at least three-fourth of the nominal value of the unit capital of the scheme with a resolution that the scheme be wound up and the approval of SEBI is obtained thereto.
Where a Scheme is to be wound up, the trustee shall give notice disclosing the circumstances leading the winding up of the Scheme in a daily newspaper having nationwide circulating and in the newspaper published in the language of the region where the CIMC is registered.
The trustee should dispose of the assets of the scheme concerned in the best interest of the unit holders of that scheme. The proceeds of sale realised, should be first utilised towards the discharge of such liabilities as are due and payable under the scheme and after making appropriate provision for meeting the expenses connected with such winding up, the balance shall be paid to the unit holders in proportion to their unit holding. After the completion of the winding up, the trustee should forward to SEBI and the unit holders –
(a) a report on the steps taken for realisation of assets of the scheme, expenses for winding up and net assets available for distribution to the unit holders, and
(b) a certificate from the auditors of the scheme to the effect that all the assets of the scheme are realised
and the details of the distribution of the proceeds.
The unclaimed money, if any at the time of winding up, should be kept separately in a bank account by the
trustee for a period of three years for the purpose of meeting investors’ claims and thereafter, should be transferred to investor protection fund, as may be specified by SEBI. On and from the date of the publication of notice, the trustee or the CIMC as the case may be, shall cease to carry on any business activities in respect of the Scheme so wound up.