Synopsis
Many unitholders are wondering whether they should say yes or no. Investors also want to know what will be the outcome in both the cases. The e-voting is scheduled to take place from December 26 to 28.
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Nearly eight months after it shut six debt mutual fund schemes, Franklin Templeton Mutual Fund is finally holding the e-voting to obtain the consent of investors to wind up six of its debt schemes. SEBI has appointed Taruvai Subayya Krishnamurthy, the former chief election commissioner of India as the observer for e-voting. Many unitholders are wondering whether they should say yes or no. Investors also want to know what will be the outcome in both the cases. The e-voting window is currently open and will end at 6 pm on December 28.
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The Chennai Financial Markets and Accountability (CFMA), an investor group, has asked investors of Franklin Templeton Mutual Fund (FTMF) to vote against the proposal by Franklin Templeton Trustee Services Pvt Ltd (Trustee) to wind up six debt schemes.
In its bulletin, CFMA says, We have consistently felt that FTMF took a unilateral decision to wind up six schemes to avert inevitable default and consequent regulatory actions against the fund managers and trustees. FTMF has front-ended the lie of COVID-19 excuse to conceal their bad, illegal, improper and risky investments made by their fund managers, whereas how come the Covid-19 reason has not been the case with any other scheme of FTMF or any other mutual fund?
Synopsis
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I want to redeem my investments in Franklin India Smaller Companies Fund. Will it be possible to redeem my investments?
-Rinesh Yadav
It seems, you are confused about the ongoing voting process on six debt schemes of Franklin Templeton Mutual Fund. The vote seeking investor consent to shut only six debt schemes that Franklin had shut on April 23, citing challenging conditions in the bond market. After court cases, finally the fund house is in the process of obtaining investors consent to shut the schemes. The schemes are: 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, and Franklin India Income Opportunities Fund.
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Franklin Templeton Mutual Fund (FTMF), which sent shock waves in April 2020 by suspending six debt schemes, has written to three lakh unit-holders who invested Rs26,000 crore in these schemes for consent to their winding up. This permission itself is the result hard-fought litigation and an order of the Karnataka High Court and the Supreme Court (SC).
But there is something more worrying, almost sinister, this time. While the e-voting is to take place from 26th December to 28th December, there seems to be an orchestrated campaign using social media to push people into signing away their rights without adequate information. FTMF wants unit-holders to vote blind, without any information about the extent of loss, the culpability of its own fund managers, the failure of its trustees, what investors can hope to get back and the payment schedule.