Franklin Templeton India receives ₹1,078 cr in 6 suspended debt schemes

Suresh P. Iyengar | | Updated on: Dec 06, 2021

The schemes had total assets under management of ₹25,000 crore

The six debt schemes of Franklin Templeton India has received ₹1,078 crore by maturities, pre-payments and coupon payments in the fortnight ended September.

The debt schemes, which are in the process of being wound up due to heavy redemption pressure amid Covid-19 pandemic, has so far got ₹8,262 crore since they were officially suspended in April.

Incidentally, the Karnataka High Court has completed hearing investors’ appeal against abrupt closure of the schemes and will soon pronounce its verdict.

Four of the six schemes have repaid the entire loan raised and are ready to distribute the money lying in the scheme after the High Court verdict. The six schemes had total asset under management of ₹25,000 crore. Franklin India Ultra Short Bond Fund and Dynamic Accrual have ₹4,094 crore and ₹498 crore, respectively for distribution among existing investors. Similarly, Franklin India Low Duration and Credit Risk funds have ₹517 crore and ₹171 crore, respectively in cash.

The debt level of the other two schemes — FT Short Term Income and Income Opportunities — have come down to ₹992 crore and ₹503 crore, respectively from ₹1,157 crore and ₹524 crore logged in fortnight ended September 15. The fund house has to repay the debt completely before it could distribute any money to investors. “We await the judgment from the (Karnataka) High Court. Our focus remains on maximising value for unit holders in these schemes and returning monies as soon as possible in accordance with the applicable regulations,” said Franklin Templeton in a statement.

Awaiting approval

The fund house has been restrained from selling any investments of the schemes till it obtain investors’ approval through e-voting. It can neither distribute the interest received on investments.

Besides moving the Court, the Economic Offence Wing of Chennai police has registered an FIR based on a few investors’ complaint. However, this has been vehemently opposed by the industry body Association of Mutual Funds in India which feels that market regulator SEBI is the only competitive authority to deal with this development.

Published on October 02, 2020
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