A majority unit-holders of Franklin Templeton Mutual Fund (FTMF) has voted in favour of winding-up of the six debt schemes, according to a report submitted by the observer appointed to oversee the e-voting process say reports. 

 

A tweet from CNBVTV18 says, "(the) Observer report reveals that over 90% of unitholders have voted for winding up for six schemes (of FTMF)."

 

Frankin Templeton Case | Observer report reveals that over 90% of unitholders have voted for winding up for 6 schemes.

Do note, observer was appointed to oversee the vote for seeking consent of unitholders on SC's directions pic.twitter.com/hxAMyZxL3S

— CNBC-TV18 (@CNBCTV18Live) January 18, 2021

 

Earlier, the Supreme Court (SC) had also asked Securities and Exchange Board of India (SEBI) to appoint an observer for the e-voting process. Subsequently, the market regulator appointed TS Krishnamurthy, former chief election commissioner (CEC) as observer for the e-voting process and issued a statement on 26 December 2020 when the e-voting process had commenced.  

 

According to FTMF, during 1st January to 15 January 2021, these schemes received Rs669 crore, of which Rs617 crore was as pre-payments. Since winding up in April last year till 15 January 2021, these six debt funds have received Rs13,789 crore, it says.

 

Individually, Franklin India Low Duration Fund, Franklin India Ultra Short Bond Fund, Dynamic Accrual Fund, Credit Risk Fund and Short Term Income Plan have 63%, 50%, 41%, 26% and 9% of their respective assets under management in cash, FTMF said in a statement.

 

The SC is scheduled to hear the matter on 25 January 2021 and would decide on how funds can be returned to the unitholders of the six debt funds of FTMF.

 

Earlier, on 23 April 2020, FTMF had announced shutting down six debt fund schemes due to poor and illiquid investments amid the coronavirus crisis, leaving lakhs of investors in a lurch. The total assets under management (AUM) of the six schemes were over Rs25,000 crore, spread across Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunities Fund.

 

(Read: Rs30,000 Crore Stuck in Franklin India Proves Why Debt MF Scheme Categories Are Not Worth the Risk)