Franklin MF to pay back Rs 9,122 cr to debt fund investors in the week of Feb 15
With the Supreme Court permitting distribution of Rs 9,122 crore (available cash in the schemes as of January 15, 2021) to the respective unitholders in proportion to their holdings in the 5 Franklin Templeton schemes under winding up, here are details about how the process of distribution will work.
The Supreme Court, as agreed by all the parties, has directed that SBI Funds Management Pvt. Ltd. (SBI) be entrusted with the activity of distributing available cash to unitholders. Franklin Templeton MF has started working closely with the SBI team and is providing the assistance SBI Funds Management requires to ensure distribution of available cash at the earliest.
Since 5 schemes of the 6 being proposed to be wound up are cash-positive, unitholders of those 5 schemes will get cash. Franklin Ultra Short Bond investors will get Rs 5,075 crore, followed by Rs 1,625 crore for Franklin Low Duration among the biggest gainers. Unitholders of Franklin India Dynamic Accrual will get Rs 1,026 crore, Franklin India Credit Risk will get Rs 926 crore and Franklin India Short Term Income will get Rs 469 crore.
Payment will be made by extinguishing proportionate units at the prevailing NAV on the date of processing.
Payment to all investors whose accounts are KYC compliant with all details available will be made during the week of February 15, 2021. You can check the status of investor accounts in the schemes under winding up.
Note that the distribution for unitholders, whose PAN/KYC, FATCA/UBO, Minor through guardian or Transmission details / documentation are not available/invalid, will be made after completion of the regulatory/ compliance requirements.
The payment will be made by SBI from the bank accounts (one per scheme) opened by them for this purpose, and the payment will be made electronically to all eligible customers.
In case the unitholder’s bank account is not eligible for an electronic payment, a demand draft/cheque will be issued and sent to their registered address.
Unitholders will receive an account statement from Franklin Templeton showing the details of units extinguished and payment made.
Capital Gains statements will also be made available. Unitholders may request the same via FT MF website, call centre or from their registered email ID.
Do note that Franklin Templeton will be responsible for deduction of TDS and issue of TDS certificates for NRI investors.
Franklin Templeton MF said in a statement: “We are pleased to inform that the Hon’ble Supreme Court, in its order dated 12 February 2021 has upheld the results of the e-voting u/r 18(15)(c) held in December 2020 and confirmed the winding up of 6 schemes. The Hon’ble Supreme Court has also appointed SBI Funds Management Pvt. Ltd. as the authorized person under regulation 41 to take next steps on monetization. Franklin Templeton Mutual Fund will provide all assistance and cooperation to SBI Funds Management to monetize the assets. The decision of the Hon’ble Supreme Court to dispense with voting u/r 41 reduces any potential delay in commencing active monetization of assets. We are thankful to our unitholders for voting overwhelmingly in favour of the orderly winding up in all 6 schemes. We deeply appreciate the continued patience and support of our investors and partners during these challenging times.”
