The Trustee of Franklin Templeton Mutual Fund in India has approached its unitholders to seek approval for the termination of the six fixed income schemes. The voting will happen from December 26-28. The meeting of unitholders of the relevant schemes was scheduled on December 29.
For the electronic voting process, the trustee has partnered with ‘K Fintech. The consent will be needed for each scheme separately. The company said the consent will be needed for each scheme separately. The purpose of voting is to seek majority approval of unitholders to wind up the six fixed income schemes in an orderly manner. The statement from the company says that as per the interim order issued by the Supreme Court on December 3 the consent has been needed under regulation 18 (15)(c) of SEBI (Mutual Funds) Regulations 1996.
The company stated that The Trustee firmly believes that shareholders will vote ‘yes’ for the proposed resolution. This will be beneficial for unitholders. The view of the trustee is that view that an orderly liquidation would maximise the value of the portfolio assets. The move will be good for the distribution of cash to shareholders on the allotted basis. The company added that there is a great chance for realising fair value within a short time.
The company expressed that if the company cannot finish up the scheme in an orderly manner they would have to accelerate a rush of redemptions which would end up in a distress sale of the portfolio securities. The action will reduce the net asset value of the scheme and it will make huge losses for shareholders. The Supreme Court in the last week had inquired Franklin Templeton Mutual Fund to start steps in one week for conducting a meeting with shareholders for asking their approval for the closure of six mutual fund schemes.
Franklin India Ultra Short Bond Fund, Franklin India Short Term Income Plan, Franklin India Credit Risk Fund, Franklin India Dynamic Accrual Fund, Franklin India Income Opportunities Fund and Franklin India Low Duration Fund are the six fixed income schemes seeking consent for the winding up.
