The six suspended debt schemes of Franklin Templeton will distribute ₹984 crore from Tuesday. The amount was accumulated in the scheme by the sale of assets and coupons.
“The payment will be distributed by the Supreme Court-appointed liquidator SBI Funds Management to all the investors whose accounts are KYC compliant,” said a spokesperson of Franklin Templeton.
Post the payout, the schemes would have returned ₹26,098 crore to the unitholders, amounting to 103 per cent of the asset under management (AUM) before the schemes were suspended on April 23, 2020, he added.
Among the six suspended schemes, Franklin India Ultra Short Bond and Short Term Income plan will distribute the highest amount of ₹478 crore and ₹179 crore, respectively, while Income Opportunities and Dynamic Accrual Funds will return ₹164 crore and ₹89 crore, respectively. Credit risk and low duration funds have ₹53 crore and ₹22 crore, respectively, for distribution among investors.
‘Repayment obligation’
The Income Opportunities has already paid 108 per cent of its AUM as of April last year. “Any recoveries/ receipts from the securities which are currently valued at zero or have matured but defaulted on their repayment obligation shall be paid out to the investors as and when such amounts are recovered,” he added.
The six schemes had AUM of over ₹25,000 crore when they were abruptly suspended from trading in April last year due to large scale redemption. Aggrieved investors had moved various High Courts against the suspension of the schemes even while the fund house claimed that it was suspended to protect their interest.
The case was taken up by the Supreme Court which appointed SBI Funds Management to liquidate the asset under the scheme and distribute the proceeds to the investors. The Supreme Court is yet to pronounce its verdict on a one-of-its-kind decision by a mutual fund to suspend a scheme.