Franklin Templeton MF’s six shut schemes generate Rs 438 crore

By: |
November 4, 2020 3:00 AM

The fund house on Tuesday said from April 24, the total cash received was Rs 8,741 crore from maturities, pre-payments, and coupon payments.

The fund house in a statement said the cash available stood at Rs 5,441 crore as of October 29 for the four cash-positive schemes, subject to fund-running expenses.The fund house in a statement said the cash available stood at Rs 5,441 crore as of October 29 for the four cash-positive schemes, subject to fund-running expenses.

The debt schemes of Franklin Templeton Mutual Fund, shut in April, continue to witness cash flow. The six schemes have received Rs 438 crore between October 16 and 29. The fund house on Tuesday said from April 24, the total cash received was Rs 8,741 crore from maturities, pre-payments, and coupon payments.

The fund house in a statement said the cash available stood at Rs 5,441 crore as of October 29 for the four cash-positive schemes, subject to fund-running expenses. Individually, Franklin India Ultra Short Bond Fund, Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund and Franklin India Credit Risk Fund have 42%, 25%, 20% and 5%, respectively, of their respective assets under management (AUM) in cash.

Franklin Templeton MF had wounded up six debt schemes, collectively worth Rs 25,800 crore, on April 23 due to severe market dislocation and illiquidity caused by the Covid-19 pandemic. Later, investors approached the Supreme Court, which had transferred the petitions before the high courts of Delhi, Madras and Gujarat to the Karnataka High Court.

The Karnataka High Court on October 24 had ruled that trustees of Franklin Templeton should take the consent of unit-holders by a simple majority for winding up the six debt funds. The court had also said in six weeks, there would not be any redemptions and AMCs and trustees shall not indulge in making any borrowings and shall not create any liability for the said six schemes.

A division bench of Chief Justice Abhay S Oka and justice Ashok S Kinagi held, “We hold that, no interference in called for in the decision of the Trustees taken on 23rd April, 2020, of winding of the said six schemes. We hold and declare that the decision of the Trustees to wind up 6 schemes mentioned in paragraph 1 of the judgment, by taking recourse to sub-clause (a) of clause 2 of Regulation 39 of the Mutual Fund Regulations cannot be implemented unless the consent of the Unit Holders is obtained in accordance with sub-clause (c) of clause 15 of Regulation 18.”

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