InvestorQ : What has the Supreme Court ordered Franklin Templeton MF to do now in the case of the six schemes where redemptions were frozen?
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What has the Supreme Court ordered Franklin Templeton MF to do now in the case of the six schemes where redemptions were frozen?

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1 month ago
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In an extremely significant and important decision, the Supreme Court of India has ordered Franklin Templeton Mutual Fund to immediately disburse a sum of Rs.9,122 crore to unit holders. This pertains to the investors in the six beleaguered debt funds that had been shut for redemptions since April 2020. This amount has to be paid within 3 weeks.

The bench has entrusted SBI MF to disburse the monies to unit holders and has asked Franklin Templeton to cooperate with SBI MF to facilitate the process. Templeton had beey trying to play hard ball for a long time, but clearly now the Supreme Court has put its foot down and asked the Templeton MF to show more commitment and walk the talk.

However, while giving this order, the Supreme Court has also allowed the litigating parties to approach the court if they had financial difficulties or if they had any other valid objections. It may be recollected that the outcome of the unit-holder poll conducted in December 2020 was made public in Jan-21 where 95% of unit holders voted to wind up the six beleaguered schemes.

This order will compel Franklin Templeton to be more transparent about the mess it has created rather than just beat around the bush. As reported on 20-Nov, cash balance in 4 cash-positive schemes stand at Rs7,226 crore. This includes coupons and redemptions also. It looks like the balance money may have to be foregone by unit holders, although it is averse to admitting the same.

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