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Investors in Franklin Templeton’s wound-up debt schemes to get ₹78 crore

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Franklin Templeton Mutual Fund has transferred distributor commission accrued in the six wound-up debt schemes to SBI Mutual Fund, people aware of the development said. This will now be distributed to the unitholders of the schemes.

SBI Mutual Fund had been appointed to liquidate the assets of the wound-up schemes and distribute the proceeds to unitholders.

The brokerage (distributor’s commission on regular plans) accrued under these six schemes from 24 April, 2020 to 17 March, 2021, when the SBI Mutual Fund took over as liquidator, was 78 crore. This amount has been added to the NAV (net asset value) of the debt schemes.

In April 2020, Franklin Templeton Mutual Fund announced the winding of six debt schemes– Franklin India Low Duration, Franklin India Dynamic Accrual, Franklin India Credit Risk, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunities Fund.

“As fair practices were not followed to wind up the schemes, it is fair that the commission will now be distributed to unitholders and not to the mutual fund distributors,” said Nishant Batra, chief goal planner, Money, Mind & Milestones

On March 24, 2022, the NAV of five debt schemes – Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Credit Risk Fund – was up by about 3-21%.

Source: Franklin Templeton website

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Source: Franklin Templeton website

In the case of Franklin India Income Opportunities Fund, all the units of the scheme have already been extinguished and the proceeds were paid back to the investors and the scheme currently stands terminated. 

“In this case, the liquidator will decide how the additional amount transferred to the scheme now gets distributed. Investors as on the date of termination of the scheme will likely get the proceeds proportionately based on the units held by them,” one of the sources said on condition of anonymity.

 

 

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