JPMorgan schemes to hive off Amtek holdings

Unit holders approve AMC's proposal to split scheme

JPMorgan Asset Management Company has obtained the approval of the unit-holders of its two trouble-hit schemes to segregate the assets.

JPMorgan India Short Term Income Fund and JPMorgan India Treasury Fund will now segregate the assets exposed to Amtek Auto’s debentures from other assets of the respective schemes, the fund house said on Sunday.

Auto component maker Amtek Auto failed to repay the two schemes, which had invested around Rs 190 crore in its debt offering.

Last month, a rating agency had suspended its coverage on Amtek Auto’s debt, following which the security turned illiquid.

The move forced JPMorgan to limit redemption in the two schemes. The move to hive off Amtek Auto exposure into separate unit will help the fund house lift the redemption restrictions on the assets other than Amtek.

About 394 unit-holders of JPMorgan India Short Term Income Fund out a total of 1,550 participated in the postal ballot conduced by the asset management company (AMC). An overwhelming 98.7 per cent voted in favour of segregation. JPMorgan India Treasury Fund almost 99 per cent of unit-holders of JPMorgan India Treasury Fund voted in favour of segregation. 301 out of 1,156 unit-holders participated in the postal ballot, which was open for a period of one week.

The company had proposed a simple 50 per cent majority from unit holders for the segregation.

“The unit holders of the respective schemes are hereby informed that, for the implementation of the proposed segregation, the segregation effective date will be September 28, 2015 and the record time will be 9 am”the AMC said in an announcement on its website.

The AMC had earlier had that all other assets of the two schemes were liquid.