SC nod for SBI MF plan to distribute Rs 9,122 cr to Franklin unitholders

Distribution mechanism was framed in consultation with Sebi and Franklin Templeton MF

The Supreme Court (SC) on Tuesday approved the mechanism proposed by SBI Mutual Fund to distribute Rs 9,122 crore to unitholders of the six shuttered debt schemes of Franklin Templeton Mutual Fund.

The distribution mechanism was framed in consultation with the market regulator, Securities and Exchange Board of India (Sebi), and Franklin Templeton MF.

“Franklin Templeton MF will provide all assistance to SBI MF to distribute the available cash to respective unitholders, at the earliest,” said a spokesperson for Franklin Templeton MF. 

The apex court will next hear the matter on February 17 to consider other aspects of the appeal.

In an order passed on February 2, the SC had directed the distribution of Rs 9,122 crore (distributable surplus as of January 15) to respective unitholders in proportion to their holdings in the schemes that have been wound up. The apex court had appointed SBI MF to undertake the distribution exercise.

The fund house had earlier stated that between April 24 and January 29, the six schemes under winding up had received Rs 14,391 crore from maturities, pre-payments, and coupons.

Part of this cash had been used to repay borrowings. The inflows received across six schemes were nearly 46 per cent higher than anticipated in the maturity profile published on April 23, 2020. 

In April last year, the fund house decided to shut the six debt schemes citing redemption pressure and lack of liquidity in the debt market.