SBI MF to liquidate remaining assets of Franklin Templeton

SBI MF to liquidate remaining assets of Franklin Templeton

MUMBAI: The Supreme Court on Friday directed that SBI MF liquidate the remaining assets in the six debt mutual fund schemes of Franklin Templeton and distribute the proceeds to unit holders. This paves the way for the sale of securities in the portfolios of the six plans and eventually shutting them.

The fund house is already in the process of distributing cash worth Rs 9,122 crore in the week beginning Feb 15, as directed by the Supreme Court earlier. After this distribution, the six schemes will have securities worth Rs 17,000 crore. SBI MF will need to liquidate these and distribute the proceeds. The Supreme Court said the sale should be undertaken with caution as an attempt to offload the securities in haste can cause a loss.

“The Supreme Court has… confirmed the winding up of six schemes. It has also appointed SBI Funds Management Pvt. Ltd. as the authorized person to take the next steps on monetization,” said a spokesperson for Franklin Templeton Mutual Fund.

The Supreme Court also upheld the results of the e-voting challenged by a few individuals.

“The wait for investors is over as they will get one tranche of money in the next week and will now look for the liquidator to help them get the right value by selling securities in the portfolio, “ says Kirtan Shah, of Sykes and Ray Equities.

About 300,000 investors in these six debt mutual fund schemes, which have assets of Rs 26,000 crore, have been hit since April 23, 2020, when the fund house decided to wind up these schemes on account of poor liquidity conditions in the debt markets after the Covid-19 outbreak.

Investors have been unable to access their money in these schemes as the winding up was challenged in courts and there was a stay order, which prevented the fund house from distributing or monetising any assets in the schemes.

The payment will be made to unit holders by extinguishing proportionate units of the scheme.

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