SBI Funds to distribute Franklin Templeton’s Rs 9,122 crore to investors: Supreme Court

By: |
February 10, 2021 3:30 AM

It also approved the distribution plan submitted by the SBI asset management company and allowed it to become a party in the case.

The apex court had on February 2 entrusted the SBI Mutual Funds to carry out the disbursement of money to 3 lakh investors of the six debt MFs in “proportion to their respective interest in the assets of the scheme” within 20 days.The apex court had on February 2 entrusted the SBI Mutual Funds to carry out the disbursement of money to 3 lakh investors of the six debt MFs in “proportion to their respective interest in the assets of the scheme” within 20 days.

The Supreme Court on Tuesday clarified that SBI Funds Management, an asset management company of the SBI Mutual Funds, will distribute Rs 9,122 crore to the unitholders of the Franklin Templeton Trusts Services’ six mutual fund schemes that were wound up on April 23.

It also approved the distribution plan submitted by the SBI asset management company and allowed it to become a party in the case.

A bench comprising justices SA Nazeer and Sanjiv Khanna modified its February 2 order where a clerical error had crept in with regard to the name of the disbursing entity. It then posted the matter for final hearing on February 17.

SBI Funds Management, a JV between SBI and AMUNDI Asset Management, on Monday had sought permission to submit the mechanism for distribution of proceeds of the six wound up schemes and also sought protection from any liability arising from such distribution exercise. It submitted that it would rely solely on the data/amounts provided by FT for effecting the distribution. Being the principal, FTMF, its trustees and management will be responsible to their investors including the issues arising out of the distribution, it said in its affidavit.

The apex court had on February 2 entrusted the SBI Mutual Funds to carry out the disbursement of money to 3 lakh investors of the six debt MFs in “proportion to their respective interest in the assets of the scheme” within 20 days.

An “overwhelming majority” of unitholders had voted in favour of the winding up of the MFs in December.

The asset management company also sought from FT a list of clean cases and a separate list of cases not qualifying for immediate disbursal, for valid reasons, duly certified by the statutory auditor so that clean cases can be processed at the earliest. “A confirmation from the statutory auditor would also be required that there is no change in investors unit balance from the date of winding up of the schemes until the distribution date or in case of changes, then these will also be certified,” the company stated.

The SC is hearing the Franklin Templeton’s appeal against the Karnataka HC’s order that asked the fund house to obtain the consent of the unitholders of the six debt mutual fund schemes that it proposed to wind up. The HC had also restricted the asset management company and trustees from taking on any fresh borrowings in the six debt schemes.

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