The unitholders’ meetings have brought to an end the voting process which started on December 26 that sought their consent to close down the schemes as directed by the Supreme Court. A majority ‘Yes’ vote to close down the scheme is considered crucial by Franklin to return the schemes in an orderly manner.
Franklin’s India head Sanjay Sapre responded to queries of unitholders in the six debt schemes on the various issues including the timeline of when the fund would return the money in the meetings today. Santosh Kamath, CIO, Fixed Income India, Franklin Templeton too was present but remained silent.
“Investors were keen to know when they can get their money back and most of the questions were directed in that context,” says Rupesh Bhansali, Head (Distribution), GEPL Capital. The fund house cannot pay investors any money till the Supreme Court directs it to do the same.
The results of this vote along with the report of the observer of the process shall be submitted in a sealed cover to the Supreme Court. Any redemption in the six fixed income schemes will continue to be stayed till the next date of hearing in the third week of January 2021.
While one investor asked trustees if there was any misdeed by the fund management team that led to the closure of the fund, another investor asked why other fund houses did not face such a problem.
Franklin attributed this to its dominance in market for lower-rated bonds.
“It said the six schemes were impacted disproportionately because of that while other AAA rated schemes were not affected,” said Amol Joshi, Founder, Plan Rupee, who attended the meeting. Joshi said a unitholder asked whether there were allegations of fund insiders knowing about it well in advance and acting on it. Sapre said no heads up was given to anybody and all disclosures were open to all unitholders.
An HNI investor asked if there was a possibility to defer payment to investors in case the “Yes” vote goes through as he was worried would have to pay short term capital gains tax of 30%.
