Franklin Templeton Mutual Fund (MF) on Thursday mentioned it has returned Rs 17,777 crore to unit holders of six shuttered debt schemes till June 15. This amounts to 71 per cent of assets below management (AUM) as on April 23, 2020, when the fund residence shut its six debt mutual fund schemes citing redemption pressures and lack of liquidity in the bond market place. Further, money to the tune of Rs 580 crore was readily available for distribution as on June 15, Franklin Templeton MF mentioned in a statement.
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 — collectively had an estimated Rs 25,000 crore as assets below management (AUM).
“The schemes have returned Rs 17,777.59 crore to unitholders amounting to 71 per cent of AUM as on April 23, 2020,” the fund residence mentioned.
Under the initially disbursement in February, investors received Rs 9,122 crore, although Rs 2,962 crore had been paid to investors through the week of April 12, Rs 2,489 crore in the week of May 3, and in the most up-to-date disbursement through the week of June 5, investors had been paid Rs 3,205 crore.
In March, the Supreme Court accepted the regular operating process (SOP) finalised by SBI Mutual Fund to monetise assets and distribute the proceeds to unitholders of the six debt schemes of Franklin Templeton MF. SBI MF has been appointed as the liquidator for the schemes below winding up by the Supreme Court.
Last week, Sebi barred Franklin Templeton from launching any new debt scheme for two years and imposed a penalty of Rs 5 crore for violating regulatory norms in the case of winding up of six debt schemes in 2020. Also, it was asked to refund investment management and advisory charges of more than Rs 512 crore (which includes interest) collected with respect to the six debt schemes. This quantity will be used to repay unitholders, as per Sebi order.
Sebi had located many irregularities in the operating of the schemes, which impacted the interests of unitholders and the asset management organization violated provisions of mutual funds norms.