Recovery in NAV supports winding up decision, says Franklin Templeton

Says current NAV of each of the six schemes is higher than on April 23, 2020, the AUM on which date was considered while returning amounts to unitholders

Franklin Templeton Mutual Fund (FT MF) in a letter to its investors has defended the move to wind up the six schemes. “Including the amounts available as of June 4, 2021 for distribution, 71 per cent of the AUM as of April 23, 2020 will have been returned to unitholders in total across all the schemes. The current net asset value (NAV) of each of the six schemes is higher than it was on April 23, 2020. We believe this supports the decision made by the Trustee in consultation with the AMC and its investment management team to wind up the six schemes,” said Sanjay Sapre, President, FT MF in a letter dated June 8.

Sebi on Monday levied a penalty of Rs 5 crore on Franklin MF for “several irregularities” in the running of its six debt schemes that were wound up in April 2020. Regulator had also directed the fund house to return over Rs 500 crore of fund management fees.

“The Sebi order does not impact the current monetization process of the six debt schemes under winding up being undertaken by the liquidator. The order also is not related to and has no impact on the other Debt, Equity, Hybrid and Offshore schemes managed by Franklin Templeton. We continue to manage over Rs 61,000 crore of AUM (as of March 2021) for over 2 million investors in India,” he said.

The fund house also informed investors that it disagrees with the findings in the Sebi order and intends to file an appeal with the Securities Appellate Tribunal.