Franklin Templeton India, which sparked a storm by shuttering six of its debt schemes, is focusing on restarting the refund process, the asset manager’s president, Sanjay Sapre, said. In his first interview since the crisis broke out in April, Sapre admitted that the Franklin Templeton brand name built up over the past 25 years has taken a massive hit. Edited excerpts:
What has been the impact on your brand in India due to this shuttering of schemes? Is the parent’s commitment to India still intact?
This decision has clearly impacted our reputation, which we worked so hard to build painstakingly over the last 25 years. We went ahead with the decision because of our firm belief that this was the right thing to do to preserve value for our investors.
Our parent’s long-term commitment to India and our investors remains steadfast. We continue to manage approximately Rs 50,000 crore of assets in schemes that are not impacted by the winding-up process. These funds are managed by independent teams of fund managers.
While Franklin is making all attempts to start the refund process, we have not heard much on fixing responsibility.
Our focus remains on a quick resolution of the legal issues, seeking vacation of the stay on e-voting and unitholder meet, and commencement of the repayment process to unit holders. We believe this is critical to regaining investor confidence.
Since the decision to shut six debt schemes, legal complications have increased. What do you make of them?
It is true different petitions were filed before various high courts by a small number of unit holders. The decision of the honourable Supreme Court to transfer all such matters to the honourable Karnataka high court will avoid divergent decisions on the same subject. The litigations have delayed the unit holders’ vote and further steps to monetise and distribute the assets of the schemes to the unit holders in accordance with regulation 41 of Sebi (Mutual Fund) Regulation 1996.
How do these legal battles affect the refund process? Should investors brace for more losses on investment?
While there has been a delay due to the various legal cases, we have been making progress. From April 24 to June 20, the schemes have received Rs 3,275 crore via maturities, pre-payments, and coupon payments—which is about 13% of the total AUM in these six schemes.
