There is good news for unitholders of the 6 fixed income schemes that Franklin Templeton closed. Soon the unitholders investing in these cash-positive schemes will get some of their money. Sources said that the Supreme Court has directed Franklin Templeton to return the money of the unitholders within 20 days. The final order of the Supreme Court has not been available yet. As per the Supreme Court order, the responsibility of overseeing fund transfers to the unitholders has been entrusted to SBI Mutual Funds.
Funds will be transferred to the unitholders in proportion to the units invested by them. However, it is not yet clear whether SBI Mutual Funds have been allowed to sell the holdings of these 6 closed schemes. In this case, Ahmedabad units had filed a petition in the Supreme Court, after which the Supreme Court has given this decision.
E-voting was done to close the schemes
The Supreme Court had directed e-voting on Franklin Templeton’s proposal to discontinue 6 fixed income schemes. In this, the unitholders voted in favor of discontinuing these mutual fund schemes. Franklin Templeton said that since its 6 plans closed in April, it has received Rs 13,789 crore in terms of maturities, pre-payments and coupon payments. Franklin Templeton said that 5 of these 6 schemes are now cash positive and they have cash of Rs 9190 as of 15 January 2021.
Available in cache
63% of the Franklin India Ultra Short Bond Fund assets closing are in cash. Whereas, 50% of Franklin India Low Duration Fund’s assets are in cash. Similarly, 41% of Franklin India Dynamic Acquire Fund, 26% of Franklin India Credit Risk Fund, and 9% of Franklin India Short Term Income Plans have assets in cash. At the same time, the level of borrowings in Franklin India Income Opportunities Fund is currently at 6% of Assets Under Management (AUM). Let us tell you that the schemes were closed on 23 April due to reduced liquidity in the bond market by the mutual fund company and redemption pressure.