Franklin Templeton's India unit may take over five years to completely return money in four credit funds to the investors. The investments in the other two funds may be returned within five years, global news agency Bloomberg reported citing an email by the asset manager to the investors. Earlier the fund manager had said that it is seeking investor nod to liquidate the six debt schemes. In case of faster sale of underlying assets and prepayment by debt-issuers, money may be returned sooner, it added.
Franklin Templeton Mutual Fund recently closed down its six fixed-income debt schemes. The move resulted in locking in investor wealth worth Rs 30,800 crore. The asset management company (AMC) had then cited redemption pressure and lack of liquidity in bond markets to voluntarily wind down the schemes effective April 23, 2020.
The six schemes included 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.
A few days back, Franklin Templeton issued an "unconditional apology" to capital market regulator Securities Exchange Board of India (SEBI) over its global chief's comments that regulatory tightening was among the factors which contributed towards closing its debt schemes.
"We deeply regret any unintended slight this may have caused to the esteemed offices of Sebi whom we have always held in the highest regard and unconditionally apologise for the same," Franklin Templeton AMC, the asset manager had said in a letter. The fund house also said that the comments were quoted "out of context" in media reports. It came after SEBI had advised Franklin Templeton Mutual Fund (FT) to focus on returning money to investors, in the context of their winding up six of their debt schemes.