While the order on other aspects of Franklin Templeton wind-up case is still pending, the apex court gave its view on how SEBI’s wind-up regulations should be interpreted.
In November 2020, Sebi had issued a show cause notice to the company following its April 2020 decision to wind up six debt schemes having Rs 25,000 crore of AUM from 3 lakh investors, citing liquidity challenges because of the pandemic.
"It would be silly to leave India, its president for India," Avinash Satwalekar, told reporters here. "I can say categorically that we are not leaving India. "
With the new appointments at the APAC level, coupled with Avinash Satwalekar’s appointment as the new President of Franklin Templeton India, the fund house aims to cover lost ground in India
One learning is that we need to be even more conservative when it comes to putting our portfolios through stress tests for extreme events, says Sanjay Sapre.
After two years of winding-up and eight tranches of payments, recovery from few exposures remains.
Having returned to investors nearly all the money stuck in the six debt funds it unceremoniously wound up two years ago, Franklin Templeton is looking to win back investors and distributors. It’s not going to be easy.
Mutual fund distributor body FIFA had moved the Supreme Court seeking distributor commissions
Mutual fund distributors say they should not be penalised for the wind-up decision of Franklin Templeton.
In Franklin Templeton, Mobius spent 30 years and during his tenure the group expanded its assets under management from US $100 million to over US $40 billion and launched several emerging market and frontier funds focusing on Asia, Latin America, Africa and Eastern Europe.
Sanjay Sapre was appointed as president of FT MF in 2016 and decision to wind-up schemes was taken during his stint.
If unitholders vote against winding-up, scheme will be re-opened, said the regulator.
Post this payout, the schemes would have returned Rs 26,098.19 crores to unitholders amounting to 103.50% of the assets under management as of April 23, 2020.
The schemes in concern, namely Franklin India Low Duration, Dynamic Accrual, Credit Risk, Short Term Income Plan, Ultra Short Bond Fund, and Income Opportunities Fund, together had an estimated AUM corpus of over Rs 25,000 crore.
The transaction is subject to customary closing conditions and is expected to close by the end of the second fiscal quarter of 2022, Franklin Templeton said.
Investors holding units of these schemes’ side pockets will receive the money in their bank accounts in the next few days.
The cryptocurrency research analyst "will be expected to help develop and manage new products in the Crypto Asset space," Franklin Templeton's LinkedIn post said.
Post this pay out, the schemes have returned Rs 23,998.84 crore to unitholders amounting to 95.18 percent of the assets under management (AUM) as on April 23, 2020.
Vodafone Idea’s securities lie in the segregated portfolios of the five debt schemes
While SEBI mutual fund regulation 18(15)(c) does not define majority, regulation 39(2)(b) says that 75 percent of the unitholders of a scheme can pass a resolution for winding-up of a scheme.
Franklin Templeton had approached Supreme Court to appeal against Karnataka High Court’s order.
Vivek Kudva, head of Asia Pacific distribution at FT, was barred last month by the Securities and Exchange Board of India (SEBI), which said he and his family members used non-public information to sell holdings worth about $4 million in Franklin debt funds that were shut down weeks later and caused investor panic.
While not a final order, SAT made its initial observations following Franklin Templeton’s appeal.
SAT grants partial relief to fund-houses from SEBI order, will pass final order on August 30.
The fund house had challenged the market regulator’s directives following the closure of six debt funds last year.