MF Update: Franklin MFs unitholders to start receiving money from February 15

Unitholders of five shut mutual fund schemes of Franklin Templeton Asset Management India (Pvt) Ltd (AMC) will start receiving cash from the week start from February 15, 2021. This is in line with the order from the Supreme Court (SC) on February 2, 2021. The SC has directed Franklin Templeton to AMC to distribute the cash to respective unitholders available as of January 15, 2021. Moreover, SC has appointed SBI Mutual Fund to supervise the distribution of these funds. The distribution of the funds would happen in tranches and the first tranche of cash would begin from the week starting from February 15, 2021.

In a communication with the unitholders, Sanjay Sapre, President, Franklin Templeton said, “Payment to all investors whose accounts are KYC compliant with all details available will be made during the week of February 15, 2021.” Further, it will extinguish proportionate units of the schemes in order to make payment to the unitholders.

The judgement of SC reads, “In view of the findings and reasons stated above, we reject the objections to poll results and hold that the unitholders of the six schemes have given their consent by a majority to windup the six schemes. Winding up and disbursements would be in terms of our directions in earlier orders dated February 2, 2021 and February 9, 2021.”

A Bench of Justices S. Abdul Nazeer and Sanjiv Khanna observed that “unitholders are the best judge and are more conversant with their own interests. All that is to be seen is that broad parameters of fairness in the administration, bona fide poll/election, and that fundamental rules of reasonable management of the public business have not been breached.”

There was also an objection against the appointment of former Chief Election Commissioner T.S. Krishnamurthy as Observer for e-voting. However, SC dismissed the objection, saying Mr Krishnamurthy was appointed by the court in order to ensure fairness and transparency.