The bonds were held in 13 segregated portfolios of five schemes, and investors holding units of these schemes’ side pockets will receive the money in their bank accounts in the next few days.
Franklin Templeton MF side-pocketed its exposure in the telecom player and in January 2020, various securities issued by Vodafone Idea in the schemes were segregated from the total portfolio. The creation of segregated portfolios is a mechanism to separate distressed, illiquid, and hard-to-value assets from other more liquid assets in a portfolio.
Franklin Templeton India Mutual Fund to repay investors of two debt funds: Report livemint.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from livemint.com Daily Mail and Mail on Sunday newspapers.
Franklin Templeton unitholders vote: What should investors do?
Investors in Franklin Templeton’s schemes will vote on whether or not to wind-up schemes December 24, 2020 / 08:59 AM IST
Eight months after Franklin Templeton mutual fund’s (FT MF) closed six of its debt schemes, and after the subsequent court battles, its unitholders will now vote and decide if these schemes should be wound-up or not.
While the legal question on whether approval from unitholders is mandatory for winding-up a scheme is being examined by the Supreme Court (SC), the fund house will seek consent from unitholders as per the directions of the Karnataka High Court.
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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.