Six shut debt schemes garner 941 crore? A complete eyewash!

By Gunjan Sriwastav, November 20 2020 01:12 PM

Recently there have been reports regarding Franklin Templeton MF's tall claims that the six shut schemes have received 941 crore maturities, prepayments and coupon payments in a fortnight, between October 30 and November 13. This apparently includes Rs 814 crore received as prepayments and takes the total cash flows received till date since April 24 to Rs 9,682 crore.

Franklin Templeton MF also claims that cash available stands at Rs 5,952 crore as of November 13 for the four cash positive schemes, subject to fund running expenses.

This saga is getting more and more laughable! As investors, we have a clue what is in fact true and what is merely an eyewash! These are the same schemes, which just under three weeks back, the Karnataka High Court ordered should not be wound up without unit holders consent. In a 330 page judgement the division bench of Chief Justice AS Oka and Justice Ashok S Kinagi said , 'We hold that no interference is called for in the decision of trustees to winding up of the said schemes. We hold and declare that the decision of the trustee to winding up the six schemes cannot be implemented until consent from the unit holders is obtained in accordance with Sub Clause C of Regulation 15. Hence we restrain the trustee to take any further steps based on the notice 23 april 2020,and 28th may 2020 issued till the consent of the unit holders is obtained. It will open for trustees. It will open for trustees to obtain consent of unit holders and to take further steps.' Yet in a complete eyewash, Franklin Templeton MFcontinues to make statements such as this recent declaration of receiving 941 crores! Where is this money? And who will decide how it will be distributed to the investors? The same trustees who unanimously decided to shut these schemes?? Who decides how much of this 9,682 crores they claim they have available will be withheld for 'fund running expenses'? Who is answering these questions?

The Karnataka High Court has reprimanded SEBI. However, the issue is that such a large loss has taken place in 6 schemes all monitored closely by SEBI. The lapses of FTMF will be better known after the finding of forensic report comes under public domain. Until then it will be only between FTMF and SEBI.

Investors are being shown a bait of available money without disclosing the value of balance fund. This is being used to make a case for seeking approval for merger without knowing what the investors will get out of their investment and that too in what period of time. FTMF is not disclosing the market value of its investment now. They should highlight this in their merger notice failing which where is the need for merger but if there is a need for merger then the crisis of loss should be disclosed.

The bottom line is, this is a total sham, and the very intelligence of an investor is being completely disregarded! They believe that as investors we can not see through this total eyewash? They should be reminded that it took a 80+ year old to take them to court and be completely reprimanded just under a month back! They should not underestimate the power of a common man's ability to seek judicial remedy.

By rajeev gupta, December 19 2020 09:09 PM
What is point inverting f the money has already been siphoned off by Franklin managers illegally and unethically .Forensic report and action against Ft manager is the need of hour

By shailendra mishra, December 18 2020 11:13 PM
Vote yes or no plz advice

By arvind krishna, December 07 2020 01:16 PM
The ruling of the hon Supreme Court did not consider the plight of investors. It's a clear WIN for Franklin who has got away with closing 6 schemes and dragging the case for more than 6 months. Franklin has so far not said how they will repay investors if investors vote YES for the closure. In the event of NO, they say there will a distress sales. In both cases investors are the losers and Franklin is getting away scot-free. SEBI is not in the picture and wonder what they are doing to protect investors.

By Yashwant Chavan, November 23 2020 01:16 PM
Big companies think they can get away with anything? This cloak and dagger approach is clearly a sham! There should be a thorough investigation of this. They should not be let off! It will set a wrong precident for other mutual fund operators!

By Saurav Das, November 20 2020 08:37 PM
I had invested in Franklin as it was big name, my trusted has totally destroyed in entire Mutual fund industries. shameless Franklin templeton. Will regret entire life for my decision on investing on Franklin. I truly appreciated Cfma for dragging franklin to court.

By Shailesh Rathod, November 20 2020 03:09 PM
This is truly disturbing. For investors such as myself, schemes like these were always considered lower risk! But the way this is being handled by the regulator, my entire belief in mutual funds is shaken. Truly regret ever investing in Franklin Templeton thinking it is regulated by SEBI!