New
Delhi :
The Supreme Court today ordered that ? 9,122 crore be paid to investors of six
Franklin Templeton Mutual Fund Schemes within 20 days.
“This
money is cash-ready with Franklin Templeton,” said the Supreme Court, directing
SBI Mutual Funds to distribute the amount among unit holders of the US-based
company.
If
there was “any difficulty” in the process, parties can approach the Supreme
Court, the judges said.
The
directions came on an appeal by Franklin Templeton challenging a Karnataka High
Court order restraining it from winding up six of its debt schemes without the
consent of its investors by a simple majority.
The
money will be distributed to the unit holders in proportion to their interest
in the assets of the scheme.
On
January 18, the top court had granted three days for filing of objections to
the e-voting on winding up of six mutual fund schemes of the company.
Voting
on winding up Franklin Templeton's six mutual fund schemes had taken place in
the last week of December and it was approved by a majority of unit holders.
On
December 3, the Supreme Court had asked Franklin Templeton Mutual Fund to
initiate steps within one week for calling a meeting of unit-holders to seek
their consent to close the schemes.
The
judges had observed that the “issue is big and people want a refund”.
Franklin
Templeton MF, one of India's most prominent fixed income fund houses, abruptly
shut down these schemes in April, during a nationwide lockdown, citing
redemption pressure, severe market dislocation and illiquidity.
These
are Franklin India Low Duration Fund, Franklin India Ultra Short Bond Fund,
Franklin India Short Term Income Plan, Franklin India Credit Risk Fund,
Franklin India Dynamic Accrual Fund and Franklin India Income Opportunities
Fund. The funds had large exposures to higher-yielding, lower-rated credit
securities.
The
decision had sparked panic withdrawals from other Franklin funds as well as
credit funds of other asset managers.
Some
investors challenged the decision in court saying their permission should have
been sought.
Till
November 27, the schemes had received total cash flows of ? 11,576 crore from
maturities, pre-payments and coupon payments since April 24, when they were
shut down.
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