On 2nd June 2020, a group of Bloggers including yours truly participated in an online meeting with Mr. Sanjay Sapre, President, Franklin Templeton India.
We got to learn about the voting exercise at Franklin Templeton Mutual Funds along with the following points:
- Notice and Voting Requirement
- E-Voting and Unitholders Meet Guidelines
- Timelines, Dates and Process for E-Voting and Unitholders Meet
- Investors Money Return
After Franklin Templeton Mutual Funds has announced the winding up of specific schemes in India, there has been a lot of concern and some jittery investors have many questions especially about these following funds:
• Franklin India Low Duration Fund
• Franklin India Dynamic Accrual Fund
• Franklin India Credit Risk Fund
• Franklin India Short Term Income Plan
• Franklin India Ultra Short Bond Fund
• Franklin India Income Opportunities Fund
Franklin Templeton India is attempting to create transparency and visibility, and to address the issues and queries.
To make info available to investors, there are FAQs, Portfolio disclosures, money receipts to investors, interviews in business dailies and newspapers etc.
For more details, investors can check this link.
As per regulation 41 of SEBI (Mutual Fund) Regulation 1996, the approval of the unitholders is required to take steps
for winding up of the scheme. The schemes can be wound up only after repaying the amount due to the unitholders.
The steps to wind-up the schemes include active monetization of assets and return of the investment
proceeds to the unitholders. In the absence of authorization, the winding-up process will be delayed as further
steps will be possible only after seeking a fresh authorization from the unitholders.
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Unitholders need to vote to start selling portfolio. They have to give the authorisation for liquidating portfolio. Thus, a voting exercise has been put in place.
Investors have two options of which they can choose any one of the following-
Option 1- Trustees will take responsibility. Kotak Mahindra Bank will act as advisor of Trustees as the latter have appointed Kotak Mahindra Bank for this purpose. Expertise, independence and governance will be available.
Option 2- Consulting arm of Deloitte; and not Trustees will be involved in the liquidation process. Decision-making will be overseen by Deloitte.
The company wants to know the majority voters choice-
whether investors (who participate in the said voting process) want the Trustees to make the decision i.e. authorize Franklin Templeton India,
or
would rather want an independent body i.e. Deloitte to do the same.
Then, the fund can be distributed to unitholders by the process set up by Franklin Templeton India.
In case the email ids of investors are not registered, they can do so by the 8th of June, 2020.
User-id and password is needed by investors for this opportunity.
Voting will take place on June 9 – June 11, 2020 and the Unitholder meets (one per
fund) on June 12, 2020.
The videoconferencing is being provided by K Fintech.
Communicating and being inclusive and transparent about the process, Franklin Templeton India's efforts have been to ensure smooth liquidation and investor confidence and ease.
We hope the process is completed and all the investors receive their funds soon.
Info is also available in Hindi.
This Ready Reckoner for Voting and Unitholder's Meet has more information.
Note: Updated info-
Regarding the E-voting process, please find below, the latest update put up on Franklin Templeton website.
The process has been suspended till further communication.
A large number of people have been impacted by Franklin Templeton's decision to discontinue the funds. It sort of shook the trust many people had in mutual funds especially debt funds. Hope at least whatever has been invested over the years will come back to the investors.
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