Will issue notice for seeking consent of unitholders shortly: Franklin Templeton MF

Franklin Templeton Mutual Fund has said that it would seek the consent of unitholders shortly in line with the SC directive.

Agencies
Franklin Templeton Mutual Fund has said that it would seek the consent of unitholders shortly in line with the SC directive. The supreme court had asked the fund house to take steps within a week to seek the consent of unitholders for shutting down of six debt schemes.

“We will issue the notice for seeking consent of unitholders shortly. We deeply appreciate the support of our investors and partners till date and hope to commence distribution of investment proceeds at the earliest,” fund house said in a statement.

Franklin Templeton Mutual Fund had shut six debt schemes on April 23, citing the adverse conditions in the bond market due to the Covid pandemic. The six schemes 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 fund house was in the process of getting investor vote on liquidation of schemes when some investors obtained a stay order from the Karnataka high court.

On October 24, the Karnataka High Court had said that the decision of the Franklin Templeton Trustee Services Private Limited to wind up six schemes cannot be implemented unless the consent of the unit holders is obtained.
The fund house has approached the supreme court to seek clarity on how to pay the money so far accumulated by the shut schemes also regarding investor consent.

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“The Hon’ble Supreme Court on December 3, 2020 issued an interim order allowing the Trustee of Franklin Templeton to seek consent of the unitholders for the winding up of the six schemes u/r 18(15)(c) of SEBI (Mutual Fund) Regulation 1996. Redemptions will continue to be suspended till further notification. We believe that the Supreme Court order will be helpful in ensuring orderly monetization and distribution of scheme assets,” said the fund house.
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