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Franklin Templeton reaches out to investors on e-voting for winding up of 6 debt schemes

Franklin Templeton has been delivering exceptional asset management for institutional, retail, and high-net-worth clients across 25 countries around the globe since 1947.Their association with India dates back to over 2 decades as an investor. Starting their journey of success in 1996 in India, they have always been dedicated to serving the best asset management by providing unique foresight for investments.They started with their flagship mutual fund, and then the approach of nourishing local culture with global vision has taken them to steady growth.

Now Franklin Templeton Mutual Fund has come out with an e-voting process to progress with its six shuttered debt schemes for its investors. Regulation 41 of SEBI (Mutual Fund) Regulation 1996 says it is necessary to take unitholder`s consent for closing the scheme. To wind it, they have to clear the due of unitholders by monetizing it.

Essential factors for unitholders: –

  • There will be a Unitholders meet as well with e-voting.
  • Both the process will be operated by K Fintech. The date of voting is June 9, 2020, and the meeting will be on June 12, 2020. Everything will be operated online.
  • Investors must have a valid id/mobile registered with the company, and to do the registration last date is June 8, 2020, and everyone will receive their login credentials via SMS.
  • The SMS/ email will consist of a link of K Fintech, the website, and a user ID and password. As there are six schemes, an investor who has invested in 6 scheme will get a unique id for each.

Franklin Templeton Asset Management (India), President, Sanjay Sapre, clearly stated the importance of e-voting for the investors to monetize the schemes. He stated his regret for winding up the decision and asked for unitholder authorization to proceed with the monetization process to return the money with the best value.

He also reassured investors that the schemes would explore all opportunities to monetize the underlying assets in the portfolio before the maturity date, without resorting to distress sales, to return investor monies at the earliest possible time.

The trustee has decided to do the liquidation process with the advisory of Kotak and Deloitte after careful analysis. Kotak Mahindra Group is one of India’s leading financial services conglomerates whereas Deloitte is a preeminent professional services firm for liquidation, resolution, restructuring and debt advisory and has handled several assignments involving stressed debt with successful deal closures of over 30+ deals in the same period. The fees payable to both Deloitte and Kotak will be borne by the AMC and the AMC is also not charging any investment management fees for these 6 funds starting April 24, 2020.

Over the next few days, the trustees will send investors in the six schemes under winding up, an email with a “Notice” related to the “Voting Process”. The voting activity will be conducted separately for each of the six schemes.

When unitholders will login to the e-voting portal they will be having two options either to choose “Yes” or “No”. By choosing “Yes”, unitholders will be authorizing the liquidation of the assets.If any unitholders don`t agree to that and chooses a “No”,the trustee will be required to propose other options to them and will have to seek their authorization by way of a subsequent voting exercise, which may result in delay in monetizing the scheme assets and distributions to the unitholders. Also,by selecting “NO,” unitholders can’t stop the winding-up of these schemes.

Mr.Sanjay Sapre expressed confidence that he was looking forward to the successful conclusion of the voting exercise and believes Franklin Templeton’s commitment to India and their investors remains steadfast, and their primary focus currently is to return the maximum possible value to all investors in the shortest possible time in these unprecedented times which he believes this is the only way to rebuild their brand reputation and more importantly, regain back the trust of the investors.

Harsh Vardhan

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