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Voting for Franklin Templeton schemes ends


The trustees of Franklin Templeton Mutual Fund told unitholders of the six shut debt schemes that these schemes have managed to get more money from issuers than what was projected earlier. In the six video meetings held on Tuesday, top management and trustees of Franklin Templeton assured investors that if the outcome of the voting process is a ‘Yes’, it would be able to monetize the papers faster while preserving their value of investments, as market conditions have become far more conducive.

The unitholders’ meetings have brought the voting process to an end. A majority ‘Yes’ vote to close down the scheme is considered crucial by Franklin Templeton to return the schemes in an orderly manner.

Franklin’s India head, Sanjay Sapre, responded to queries of unitholders in the six debt schemes on the various issues including the timeline for the return of investors’ money. Santosh Kamath, CIO, Fixed Income-Franklin Templeton India, was also present but didn’t speak to the unit-holders.

“Investors were keen to know when they can get their money back and most of the questions were directed in that context,” says Rupesh Bhansali, Head (Distribution), GEPL Capital. The fund house cannot pay investors any money till the Supreme Court directs it to do the same.

The results of this voting process along with the report of the observer, TS Krishnamoorthy, shall be submitted in a sealed cover to the Supreme Court. Any redemption in the six fixed income schemes will continue to be stayed till the next date of hearing in the third week of January, 2021.

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In the video meeting, investors asked the trustees if there was any misdeed by the fund management team that led to the closure of the fund and why other fund houses did not face such a problem. An HNI investor asked if there was a possibility to defer payment to investors in case the “Yes” vote goes through as he was worried about having to pay short term capital gains tax of 30%.

Franklin attributed the closing down of six debt schemes to its dominance in the market for lower-rated bonds.

“It said the six schemes were impacted disproportionately because of that while other AAA rated schemes were not affected,” said Amol Joshi, Founder, Plan Rupee, who attended the meeting. Joshi said a unitholder asked whether there were allegations of fund insiders knowing about it well in advance and acting on it. Sapre said no heads up was given to anybody and all disclosures were open to all unitholders.





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