Six Franklin MF shuttered schemes have Rs 1,981 cr cash for distribution

Sources the money will be given to investors in next few days; fund house has already returned Rs 21,080.34 cr or 84% so far

The six shuttered debt schemes of Franklin Templeton MF have Rs 1,981.02 crore as cash available for distribution to the unit holders. The fund house has already returned Rs 21,080.34 crore amounting to 84 per cent of assets under management (AUM) as on April 23, 2020.

Sources in the industry stated that the cash surplus available will be given to the investors in the next few days. The Trustee of the fund house had decided to wind up the six debt schemes in April 2020 as debt markets had become illiquid due to the impact of Covid-19.

Between February and July, Franklin Templeton MF had distributed cash in five tranches amounting to Rs 21,080.34 crore. According to the fund house, the average net asset value (NAV) at which the five tranches have been disbursed for each of the six schemes is higher than the NAV as on April 23, 2020.

In an order passed on June 7, Securities and Exchange Board of India (Sebi) had directed Franklin Templeton MF to disgorge Rs 512 crore that it had collected as investment management and advisory fees between June 2018 and April 2020. The market regulator had also fined Franklin Rs 5 crore for “several irregularities” in the running of the six wound-up schemes.

But later, The Securities Appellate Tribunal (SAT) provided interim relief to the fund house by partly staying an order passed by Sebi against it.

In its letter to investors last week, Sanjay Sapre, President, Franklin Templeton Asset Management (India) had said, “With respect to the appeals filed before the SAT, the SAT has issued orders staying enforcement of Sebi’s orders conditioned on deposit of a portion of the monetary penalties.”