On Tuesday, August 22, 2023, SBI Funds Management Ltd reported that the assets in the six closed debt schemes of Franklin Templeton Mutual Fund (FTMF) had been liquidated and handed Rs 27,508 crore to the latter’s unitholders. Franklin Templeton announced the closure of the six debt mutual fund schemes in April 2020, citing redemption pressures and a lack of bond market liquidity.
The Supreme Court subsequently assigned SBI Funds Management Ltd the job of carrying out the process of payout and liquidation of assets of the six wound-up debt plans of FTMF in 2021.
SBI Funds Management said in a statement that it has done this in order to sell 217 securities and distribute about Rs 27,508 crore, or 10% of the value of the securities as of the date of winding up, or April 23, 2020. When the decision to shut the funds was made, the six plans had a total of Rs 25,215 crore in assets under management. “We are happy to share that the last tranche of the securities, forming part of FTMF wound up debt schemes, has been liquidated as part of the above mandate given to us,” SBI Funds stated.
The fund house said that in order to maximize the liquidation value and protect the interests of FTMF unitholders, the liquidation activity was carried out without causing any market disruption.
The funds were Franklin India Income Opportunities Fund, Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, and Franklin India Ultra Short Bond Fund.
Mutual Fund Scheme Closure
Since the Securities and Exchanges Board of India (Sebi) regulates mutual funds, when a mutual fund business goes down, either the trustees of the fund must request permission from Sebi to close, or Sebi might order a fund to dissolve on its own. Before winding up, Sebi requires that all investors get their money back based on the most recent net asset value.
But when a mutual fund is purchased by another fund firm, there are two options: the schemes either continue under new management or they combine with new schemes. Investors are offered the option to leave the plans in both situations without being charged a fee.
