Franklin Templeton MF liquidation: All you need to know
After winding up six debt funds and locking Rs. 30,800 crore of investor money, Franklin Templeton India is gearing up to finalize the liquidation process of the schemes through an e-vote. In a Q&A session with reporters, Sanjay Sapre, the President of FT India, gave an insight into the process and how and when they plan to return the money. Here's all about it.
Sapre said while they recognize investors are worried, the first step towards returning their money with transparency is holding the e-vote to define the liquidation process of wound-up funds. As part of this, he said, the investors/unit-holders will have to choose who should oversee the liquidation of the funds, which is selling their assets, to generate the proceeds required for returning the money back.
The investors will be given two options to choose from for liquidation of the debt funds. The first option authorizes FT Trustee to monetize the assets with the assistance of the AMC and Kotak Mahindra Bank. Meanwhile, the second one strives to authorize Deloitte Touche Tohmatsu India to monetize the assets with the assistance of the AMC and Kotak Mahindra as an independent advisor.
Sapre said they have partnered with K Fintech for handling the voting process. The company will send a link via SMS/email to registered investors with respect to each of their debt funds (if a person has two of the six funds, they will get two links). Then, clicking on the link will generate unique user ID and passwords which can be used to vote.
While voting, FT will ask investors to choose between 'Yes' and 'No' if they want to proceed with liquidation. The 'Yes' will show the two options, while the 'No' will just register their response without taking their opinion for the liquidation process. Sapre emphasized that choosing 'No' will not change the status of the scheme and they will still remain under winding up.
If most of the investors choose 'No' to proceed with the liquidation for any of the six funds, the trustees will have to hold another voting exercise, which would evidently delay the asset monetization and proceed distribution process.
After voting, FT will hold a virtual unit-holder meet for all the six schemes on June 12. As part of this, investors who didn't vote before will be allowed to vote, while the trustees will present the liquidation plan and answer all the questions. Then, the votes will be scrutinized by J. Sagar Associates and the results will be declared to trustees, investors.
Sapre added the money will be returned for at least two of the debt funds, Franklin Ultra Short Term Fund and Franklin Dynamic Accrual Fund, in about four weeks' time from today, which is by July. He stated that the two schemes have already repaid their bank borrowings and are cash positive now. Once the voting completes, repayment will begin for them.
Sapre said the company is moving ahead with a focus on managing the liquidation process transparently and giving the money back as soon as possible, without any preferences or biases. He asserted by repaying the money with full transparency and control, the company hopes to gain trust and confidence of the investors of these debt funds and others investing in FT India products.