Franklin Templeton on Tuesday informed the Supreme Court that it has so far distributed Rs 26,098 crore to unit holders of the six mutual fund debt schemes that it had proposed to wind up in 2020 citing difficulties in the bond market due to the pandemic. This amount represent 103.5% of the aggregate assets under management (AUM) of the schemes at the time of winding up on April 23, 2020, it said.
“The cumulative value of cash distributed, cash available for distribution and value of remaining portfolio as of December 31, 2020 is Rs 27,354 crore, which is 108% of the aggregate AUM as of April 23, 2020,” the Fund house said in its affidavit.As the remaining securities held by the schemes are liquidated, additional cash will be realised for distribution to unitholders in accordance with the SC directions, Franklin said, adding that around Rs 18 crore is available for further distribution in the next payout from the schemes.
A bench comprising Justice SA Nazir and Justice Sanjiv Khanna expressed satisfaction, saying the issue of unitholders’ interests is nearly settled as the apprehension of shortfall have been allayed.
It, however, said that it will wait for the final decision of the Securities Appellate Tribunal, which is hearing Franklin’s appeals against the Sebi’s July order levying disgorgement and monetary penalties and the ban imposed on Franklin’s employees from accessing the securities market for a year for indulging in alleged unfair trade practices.
SAT had stayed the market regulator’s order subject to deposit of 50% of the penalty amounts. The next date of hearing before the tribunal is on February 11. The SC will hear the case next in April.