Letter from Franklin Templeton to investors in the 6 wound-up debt schemes

Finally, after long-drawn legal wranglings, Franklin Templeton will start distributing the cash in the 6 debt schemes that were would up. Here’s a letter from Sanjay Sapre, President of FT to investors.

February 11, 2021

Dear Investor,

In my previous communication, I had shared with you that the Hon’ble Supreme Court has accepted our prayer to permit distribution of INR 9,122 crores (available cash in the schemes as of January 15, 2021) to the respective unitholders in proportion to their holdings in the schemes under winding up. The Hon’ble Supreme Court, as agreed by all the parties, has directed that SBI Funds Management Pvt. Ltd. (SBI) be entrusted with the activity of distributing available cash to unitholders. I would like to update you, that we have started working closely with the SBI team and are providing the assistance they require to ensure distribution of available cash at the earliest.

This letter is to update you that the Hon’ble Supreme Court has accepted the application for placing on record the distribution mechanism proposed to be followed by SBI, in compliance with the order of the Hon’ble Supreme Court dated February 2, 2021. Available cash across schemes is as follows:

Scheme Amount (INR in crores)
Franklin India Ultra Short Bond Fund 5075.39
Franklin India Low Duration Fund 1625.36
Franklin India Short Term Income Fund 469.24
Franklin India Credit Risk Fund 926.15
Franklin India Dynamic Accrual Fund 1025.45
Total 9121.59

Please find below the process of distribution of monies for the five cash positive schemes under winding up:

Payment will be made by extinguishing proportionate units at the prevailing NAV on the date of processing.

Payment to all investors whose accounts are KYC compliant with all details available will be made during the week of February 15, 2021. Please click here to check the status of your account in the schemes under winding up. Please note that the distribution for unitholders, whose PAN/KYC, FATCA/UBO, Minor through guardian or Transmission details / documentation are not available/invalid, will be made after completion of the regulatory/ compliance requirements.

Payment will be made by SBI from the bank accounts (one per scheme) opened by them for this purpose.

Payment will be made electronically to all eligible customers.

In case your bank account is not eligible for an electronic payment, a Demand Draft will be

issued and sent to your registered address.

You will receive an account statement from Franklin Templeton showing the details of units extinguished and payment made.

Capital Gains statements will also be made available. You may request the same via our website, call centre or from your registered email ID.

Franklin Templeton will be responsible for deduction of TDS and issue of TDS certificates for NRI investors.

Franklin Templeton will assist with query resolution, unclaimed payments or any other payment issues.

In the meanwhile, my team and I remain available to answer any questions you may have. Please write to us at [email protected] or call our toll-free investor helplines 1-800-258- 4255 or 1-800-425-4255 from 8 a.m. to 9 p.m. Monday to Saturday.

Thank you once again for your continued patience and support during these challenging times. Please stay safe and healthy.

Sincerely,

Sanjay Sapre

President, Franklin Templeton Asset Management (India) Pvt. Ltd.

How will the cash be distributed?

The units proportional to the cash in the funds will be debited and the cash will be credited to your bank accounts. Here’s how the calculation will work:

Scheme & Plan name: FIUBF-Retail Plan Growth Option

  • As on February 12, 2021 and prior to extinguishment

    • Portfolio value: INR 100,000 (A)
    • NAV per unit: 27.7411 (B)
  • Units prior to extinguishment: 3604.760 [100,000 / 27.7411] © = (A / B)

  • Payout percentage: 49.53% (D)

  • Payout amount: INR 49,530 (E) = (A x D)

  • Units extinguished: 1,785.437 (C x D) or (E / B)

When will I get my money?

You should get the money in the next few days.

8 Likes

Debit done for FT ultra short term fund units but money still not credited to either trading account or bank account. When credit will be credited ? Please help

I have received the amount this evening directly in bank account.

Just got

Received the amount directly in primary connected bank account.
BUT:

  • On COIN platform, no change has happened in the holding of the FT UST
  • In the Console portfolio, it seems to have updated

@Bhuvan I suppose Zerodha team is aware of that and will make the correction in COIN platform, etc. since the percentage redemption is constant across the concerned users.

Hi @Bhuvan

Any idea about this. When will the update in unit holdings in COIN for these MFs happen? Or do we have to do that change at our end.
Let us know.

I called franklin toll free number and asked for capital gain statement and account statement

Hi @siva @Bhuvan

Since we have received part payment for Franklin can you update console and coin so we can see our updated tax P&L.

This would help us to do tax planning. Thanks

Hi @siva, @Bhuvan

Is there any update on correction of #units in Console and COIN for Franklin MFs that are wounding up?
Plenty of people have asked this question over the last three weeks, with no answer one way or the other.
Can you at least let us know when it would happen? FY is close to ending and people would soon start tax planning.

This will be done in a week, this requires some work on our part. Don’t think it’s a big issue because you can’t sell the units anyways. As for your tax considerations, the money you received in the bank is what matters.

Thank you for your reply, Bhuvan.
Hope this gets corrected as soon as possible.

Hi @Bhuvan

16 days since the ‘within a week’ plan to update the units in Franklin’s affected MFs and the situation is still the same. Can you please help get this done, or at least let us know what kind of complications is associated with this change?