Franklin Templeton Mutual Fund has received consent of unitholders for winding up of its six debt schemes, as per the observers' report submitted before the Supreme Court. The report, which was disclosed on January 18, 2021, reportedly suggest than more than 90 per cent of the unitholders in these six schemes have voted for winding up.
The e-voting took place after Supreme Court asked Franklin Templeton MF to call a meeting of unitholders to seek their consent for closure of six mutual fund schemes. The apex court will next hear the matter on January 25, 2021, to give directions on how the funds in the schemes should be paid back to the unitholders.
The electronic voting process for winding up of six debt schemes of Franklin Templeton MF took place between December 26-28, where unitholders were allowed to vote during video conference with trustees on December 29, 2020. The unitholders were asked to take a call on whether to give consent to the winding up decision or withhold it, which would have allowed the schemes to reopen for purchase and redemption.
Market regulator SEBI had appointed Taruvai Subayya, former chief election commissioner of India, as the observer for e-voting.
Franklin Templeton MF closed debt mutual fund schemes on April 23, 2020 citing redemption pressures and lack of liquidity in the bond market in wake of COVID-19 pandemic. The schemes - 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 - together had an estimated Rs 25,000 crore as assets under management (AUM).
From April 24 to January 15, the schemes under winding up have received over Rs 13,789 crore from maturities, pre-payments, and coupons, with five schemes cash-positive now. Out of this, the schemes have received Rs 669 crore in last fortnight (January 1-15) itself, of which Rs 617 crore was as pre-payments. The cash available stands at Rs 9,190 crore as of January 15, for these five cash positive schemes, subject to fund running expenses.
By Chitranjan Kumar