Supreme Court asks Franklin Templeton Mutual Fund to make next round of payments in shut debt schemes

The Supreme Court of India has ordered Franklin Templeton Mutual Fund and the liquidator MF to release the next round of payment of Rs 684 crore to the unitholders of the wound-up schemes. SBI MF, the liquidator, has said that the cash available in the six schemes will be distributed in due course.

The total amount distributed in the six schemes would be 106% of the AUM as on April 23, 2020. Five out of six wound-up schemes have returned over 100% of the AUM at the time of winding up. The total amount disbursed would range between 97% and 112% of the respective AUM values of the six schemes as of April 23, 2020.

“We continue to make all efforts for recovery of proceeds from issuers who have defaulted on their repayment obligations. The honourable SC decided that the distribution commission is not payable from the schemes under winding-up, after announcement of winding-up decision by the Trustees. We are awaiting a copy of the judgment. We remain committed to serving the long-term interests of our investors and distribution partners,” Franklin Templeton said in a statement.

In April 2020, Franklin Templeton Mutual Fund had wound up six debt schemes– Franklin India Low Duration, Franklin India Dynamic Accrual, Franklin India Credit Risk, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunities Fund – leading to multiple court cases and multiple Sebi action.


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