NEW DELHI: The Supreme Court on Tuesday directed Franklin Templeton Mutual Fund to pay Rs 9,122 crore among unitholders of six mutual fund schemes that were shut down by the company abruptly.
The apex court has asked the amount be disbursed among the unit holders in proportion to the respective interests in the assets of the scheme.
SBI Mutual Fund has been directed to carry out the exercise of disbursement, after a counsel for all parties agreed to this arrangement.
The top court added that the distribution of money to the unit holders should be completed within 20 days from Tuesday.
On April 23 last year, Franklin Templeton MF shut six debt mutual fund schemes on April 23, citing redemption pressures and lack of liquidity in the bond market.
The schemes — Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund, and Franklin India Income Opportunities Fund — together had an estimated Rs 25,000 crore as assets under management (AUM).
However, the unitholders of the six schemes have already received Rs 14,391 crore from maturities, pre-payments and coupon payments since their closing down in April.
Commenting on the development, counsel for CFMA, an investor body, Nithyaesh Natraj said, “The unit-holders finally have something to cheer after about nine months when six open-ended debt schemes were unilaterally and arbitrarily wound up by the Trustees of FTMF citing the strange reason of Covid-19, which purportedly impacted only these six debt schemes of FTMF. I am happy for the unit-holders, but this is only half the battle won.”
In a statement, CFMA said the hard-earned and tax paid money of the unit-holders has been invested in regulated debt schemes and not in some chit funds like Rose Valley or PACL.
“It is, therefore, the responsibility of the SEBI to make the Trustees of FTMF legally and morally duty-bound to ensure that the money of the unit-holders is not wiped off, because of bad investment decisions of the FTMF Fund Managers and the entire money is returned to the Unit Holders. If SEBI doesn’t act, there would be no difference among the regulated markets and chit funds,” it added.
(With inputs from agencies)

News Of India


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