The Supreme Court Tuesday ordered that Rs 9,122 crore be disbursed within three weeks to the unitholders of Franklin Templeton’s six mutual fund schemes which are proposed to be wound up. A bench of Justices S A Nazeer and Sanjiv Khanna said that the disbursal of money would be done in proportion to unitholders’ interest in the assets.
Franklin Templeton MF closed these six debt mutual fund schemes on April 23, citing redemption pressure and lack of liquidity in the bond market. The six schemes are Franklin India Low Duration Fund, Franklin India Ultra Short Bond Fund, Franklin India Short Term Income Plan, Franklin India Credit Risk Fund, Franklin India Dynamic Accrual Fund, and Franklin India Income Opportunities Fund.
The bench has entrusted SBI Mutual Fund to disburse the money. The bench granted liberty to the litigating parties to approach the court in case of any difficulty in the disbursal of money to the unitholders. The court also gave the parties liberty to move applications in case of any difficulty arising out of the process. The voting for winding up Franklin Templeton’s six mutual fund schemes took place in the last week of December. It has been approved by the majority of unitholders.
The Karnataka High Court had earlier said that decision of Franklin Templeton Trustee Services Private Limited to wind up six schemes cannot be implemented unless the consent of the unitholders is obtained.
Franklin Templeton MF closed these six debt mutual fund schemes on April 23, citing redemption pressure and lack of liquidity in the bond market. Till November 27, 2020, the six schemes received total cash flows of Rs 11,576 crore from maturities, pre-payments, and coupon payments since April 24 last year. The cash available stands at Rs 7,226 crore as of November 27, 2020, for the four cash positive schemes, subject to fund running expenses.