SC upholds validity of Franklin e-vote, paves way for wind up of 6 schemes

Authorises SBI Funds Management to take next steps on monetisation

The Supreme Court (SC) on Friday upheld the validity of Fraklin Templeton’s e-voting process, paving the wave for the wind-up of the asset manager's six debt schemes. 

In addition, it has appointed SBI Funds Management the authorised entity to work on the monetisation of assets.

“Franklin Templeton Mutual Fund will provide all assistance and cooperation to SBI Funds Management to monetise the assets. The decision of the Supreme Court to dispense with voting under regulation 41 reduces any potential delay in commencing active monetisation of assets,” said a Franklin spokesperson.

Earlier this week, the apex court had approved of the mechanism proposed by SBI Funds Management to distribute Rs 9,122 crore to unitholders of the six debt schemes. The distribution mechanism was framed in consultation with the Securities and Exchange Board of India and Franklin Templeton MF.

In a letter to investors on Thursday, Sanjay Sapre, president of Franklin Templeton Asset Management, had said the payment would be made by extinguishing proportionate units at the prevailing net asset value on the date of processing. The payment to all investors whose accounts are KYC-compliant with all details available would be made during the week of February 15.

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 six debt schemes citing redemption pressure and lack of liquidity in the debt market.