E-voting on closure of six Franklin Templeton debt schemes to start on June 9

Our Bureau Mumbai | Updated on May 29, 2020

Franklin Templeton Mutual Fund will start seeking unit holders’ approval to close six debt schemes through e-voting between June 9 and 11.

A meeting of unit holders for each of the six schemes will be held on June 12, said the fund house in a statement on Friday.

Last week, Franklin Templeton Trustee Services appointed Kotak Mahindra Bank as an independent advisor to monetise the assets held by the six debt schemes that are being wound up abruptly.

The fund house was instructed by market regulator SEBI to appoint an independent advisor to ensure an orderly winding up of these schemes, while preserving maximum value for investors.

Kotak Mahindra Bank through its debt capital markets team will work closely with Franklin Templeton Trustees for all portfolio actions in the six schemes — Franklin India Low Duration Fund, Dynamic Accrual, Credit Risk, Short Term Income, Ultra Short Bond and Income Opportunities Fund.

Franklin Templeton had earlier clarified that the decision to close the six debt funds will not be reversed even if investors vote ‘against’ the proposal.

In a letter to investors, Sanjay Sapre, President, Franklin Templeton Asset Management (India), said some investors believe that by voting in the “negative”, the winding up will be reversed and the six schemes will recommence the redemption and subscription process.

“This is not true. The purpose of the vote is to authorise the trustees to take the next steps for disposal of the assets of the scheme and distribution of the proceeds to the unit holders in accordance with regulations,” he said.

If the trustees do not receive authorisation to proceed with disposal of assets of the scheme, this may delay the process of monetising such assets and distribution of proceeds.Therefore, he urged investors not to base their choice on market speculations and rumours.

Published on May 29, 2020

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