New Delhi, February 3: The Supreme Court has directed Franklin Templeton to distribute Rs 9,122 crore to unitholders of the six schemes that were shut by the mutual fund house in April. The apex court has directed SBI Mutual Fund to carry out the exercise of disbursement.
Supreme Court bench of Justices Abdul Nazeer and Sanjiv Khanna have directed the fund house to distribute the money to unitholders within twenty days from today.
“We are pleased that, as requested by us, and in the best interests of Unitholders, the Hon’ble Supreme Court has directed the distribution of INR 9,122 crore (distributable surplus as of 15 January 2021) to the respective unitholders in proportion to their holdings in the schemes under winding up, subject to fund running expenses. As previously stated, we went ahead with the difficult decision of winding up these schemes because of our firm belief that this was the right decision to preserve value for investors, as evidenced by the generation of cash in these schemes over the last 9 months. We believe the distribution of monies will provide unitholders with much needed liquidity and look forward to working with the Regulator and SBI Mutual Fund to distribute the cash within the period stipulated by the Court,” Franklin Templeton Mutual Fund said in a statement, as reported by The Economic Times.
Earlier, Franklin Templeton Mutual Fund had updated the unitholders that its six shut schemes have received Rs 14,391 crore from maturities, pre-payments and coupon payments since their closing down in April.
Franklin Templeton MF shut six debt mutual fund schemes on April 23, citing redemption pressures and lack of liquidity in the bond market.
Individually, Franklin India Ultra Short Bond Fund, Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund and Franklin India Short Term Income Plan have 65 per cent, 53 per cent, 41 per cent, 27 per cent and 11 per cent of their AUM in cash, respectively.