Franklin Templeton gets over Rs 700 crore more in six suspended debt funds

Six schemes of Franklin Templeton Mutual Fund (MF) have received Rs 708 crore from maturities, pre-payments and coupon payments during August 1-14, 2020. This takes the total cash flow received by the company since April 24, 2020, to Rs 4,988 crore.

Investors' money worth nearly Rs 26,000 crore is stuck in the six funds that were closed on  April 23.

Among the six debt funds, the Franklin India Ultra Short Bond Fund (FIUBF) and the Franklin India Dynamic Accrual Fund (FIDA) received in cash, 21 percent and 12 percent of their assets under management (AUM), respectively.

Further, the company added that borrowing levels in the other funds continue to fall with Franklin India Low Duration Fund (FILDF) and Franklin India Credit Risk Fund (FICRF) now having outstanding borrowing of 1 percent and 5 percent of their AUM, respectively.

The money will be distributed to unitholders subject to a successful unitholder vote, the company said. However, as per a Karnataka High Court order, the e-voting and unitholders meet will remain suspended until further directions.

“This is very crucial as active monetization of assets of the schemes and distribution of investment proceeds to the unitholders will be possible only after successful e-voting,” the statement read.

The Supreme Court had in June asked all petitions related to the case to be transferred from various high courts to the Karnataka HC.

On April 23, Franklin Templeton announced the closure of its schemes. The combined size of these six schemes was Rs 25,856 crore as on April 22. Looking at its past track record, nobody would have expected that things would come to a stage where the fund house would have had to close six of its debt schemes.

The house is India’s ninth-largest mutual fund with average assets under management (January-March 2020) of Rs 1.16 lakh crore.