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Franklin Templeton appoints Kotak Bank as advisor to assist in monetising assets of 6 Wind-up Schemes

Franklin Templeton appoints Kotak Bank as advisor to wind up 6 schemesOn May 20, 2020 Franklin Templeton Trustee Services Pvt. Ltd. has appointed an independent advisor Kotak Mahindra Bank to work together with Franklin Templeton Asset Management (India) Pvt. Ltd (the AMC), to assist the Trustees in monetizing portfolios of the 6 schemes that are being wound up & make payouts to the affected investors.

  • The 6 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  of Franklin Templeton Mutual Fund

Major Highlights

i.As per Securities and Exchange Board of India(SEBI), the winding-up process will have legal and operational challenges, who will assist them with the process, even if the approval of unit holders is being sought for the winding up.

ii.The advisor, whenever required will act as an agent for the trustees. A negative outcome in the voting may delay the process to liquidate assets of the scheme and payment of money to investors.

iii.The schemes will explore all possibilities to monetise the underlying assets in the portfolio before their respective maturities & the aim will be to return the money well in advance of the maturity dates, the fund house will not resort to distress sale

iv.If trustees do not receive authorization to proceed with the disposal of assets of the scheme, this may delay the process of monetising such assets and distribution of proceeds.

v.The payment schedule or payouts can be finalised and implemented only after the successful completion of the voting process.

vi.Franklin Templeton is committed to ensure an orderly and equitable exit for all investors at the earliest possible time and the tie-up will ensure an efficient wind-up of these schemes, while preserving maximum value for investors.

Background

The Asset Management Company (AMC) on 23 April announced that six of its debt schemes are being wound up due to severe illiquidity and redemption pressures. This shuttering of schemes left 300,000 investors in a stumble with a total investment of Rs 25,856 crore.

About Franklin Templeton:
Executive Chairman and Chairman of the Board– Gregory E. Johnson
President, India– Sanjay Sapre

About Kotak Mahindra Bank:

CEO– Uday Kotak

President Debt Capital Markets: Sujata Guhathakurta





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