Supreme Court approves SBI MF plan for Franklin Templeton schemes

Supreme Court of India

The Supreme Court on Thursday accepted the standard operating procedure (SOP) statement prepared by SBI Funds Management for disposal of assets to unit holders in six Franklin Templeton debt schemes frozen on April 23, 2020.

The SOP was prepared by FT Mutual Fund and market regulator SEBI.

The six schemes have already distributed Rs 9,122 crore to investors and have accrued another Rs 1,370 crore in cash, as on March 15. The assets in the schemes were worth around Rs 26,000 crore on the day they were frozen.

SBI Funds Management (SBI MF) told the court that disposal to unit holders would be done by a team headed by an official not below the rank of Vice President in the company. FT Asset Management would also provide two mid-level officials with a clean track record to assist it in its work.

As part of monetisation plan for the frozen schemes, the securities and money would be transferred to specially designated accounts for the disposal and FT would have to provide SBI MF with all the relevant documentation. It would also have to bear the expenses of the winding-up.

The SOP also says that SBI MF will not bid for assets to avoid conflict of interest. Different methods would be adopted for disposal of liquid and rest of the assets. If even after this process, some assets remain to be liquidated, they would be returned to FT for necessary action.

In case of any defaults in the paper held by the schemes, it would have to initiate proceedings against the defaulting issuer. Any surplus amount would have to be deployed in liquid schemes and whenever additional amount gets collected, it would be distributed to the unit holders.

Interestingly, the current NAV of closed FT schemes is higher than the NAV on the of the winding-up.




(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel