Franklin Templeton Mutual Fund has claimed that it has received Rs.4280 crore from maturities, pre-payments and coupons of six wound up schemes since April 24. This is about 16.5% of the Rs 26,000 crore that FT MF owes investors.
The fund house had wound up six debt mutual fund schemes on April 23, citing redemption pressure, heightened volatility and liquidity crunch in the bond market.
In a letter to investors, Sanjay Sapre, President, Franklin Templeton MF (India) said that between April 24 and July 31 the six wound up schemes have received Rs 4,280 crore from maturities, pre-payments and coupons.
Sapre added that these cash flows have been received without the ability to efficiently monetize assets. “The schemes will endeavor to accelerate monetization post the successful completion of the e-voting exercise and the Unitholder meet, which can only take place after the completion of the legal process.”
Karnataka High Court has scheduled the next hearing of cases on the winding up of debt schemes of Franklin Templeton MF on August 7, 2020. The e-voting and the unitholders meet continue to remain suspended till the fund house gets further directions from Karnataka High Court and efficient monetization of assets of the schemes and distribution of investment proceeds to the unitholders will be possible only after successful e-voting.
Further, the fund house informed investors that as on July 31, 2020, while two schemes were already cash positive, the borrowing levels in the other schemes continue to come down steadily. Franklin India Low Duration Fund (FILDF) and Franklin India Credit Risk Fund (FICRF) now have an outstanding borrowing of only 1% and 4% of their AUM respectively. However, investors need not worry as the AUMs and NAVs of the schemes are net of such payouts.
Sapre also dismissed media reports that said FT MF could face SEBI heat as a forensic auditor has submitted adverse findings against the fund house. Sapre urged investors not to be swayed by such reports “which often lack a basis in fact” and are “unsubstantiated rumours and insinuations around the audit completion”.
