About a month ago, we had a discussion with the President of Franklin Templeton India regarding the 6 debt schemes that they had to shut down. As Mr. Sanjay Sapre had explained, it was not wholly unexpected, given that the market had shown risk aversion because of fears around the pandemic and anxiety around the lockdown. He had also been quick to reassure that there was no need to panic. At present, the company is looking forward to transparent liquidation of assets of through Franklin Templeton debt scheme investor voting.
We, and a few of our bloggers, had another chat with Mr. Sapre the previous week, where he shared an update with us on how the company was handling the closures of the funds.
Given how information can be twisted and misrepresented, the company’s first step was to make every effort to reach out to people, communicating the need for such a drastic and unprecedented step of closing the debt schemes. This was done by way of FAQs, press releases, and making as much information as possible available to the investors.
In view of returning money to investors, steps were taken as per regulations to liquidate the assets. The E-voting and the Unitholders meet that were scheduled in the first fortnight of June have been put on hold for now. Much thought and effort had gone in telling the investors to register their email ids with the company so that they could vote comfortably from their homes.
The Franklin Templeton debt scheme investor voting was to decide which route the company could take to liquidate so as to return money to those who were invested in these schemes. Independent advisors have been called on board to make the process transparent and to showcase a willingness on the part of Franklin Templeton India to scrutiny.
For a company that has been in India for more than 25 years, consumer trust is important to its working. Due to market volatility, there has been much uncertainty but Franklin Templeton India has been working and will continue to work ceaselessly to rebuild this trust.
The chat was interactive and during the Q&A session, one of the questions raised was how was the company planning to get back into the system with new schemes and Mr. Sapre said that Franklin Templeton India’s goal right now was to ensure that the monies are returned to the investors timely and once that was completed, to continue to manage the current funds as efficiently as possible.
He mentioned how for 2 of the 6 debt schemes that had to be closed, investors would start receiving money as early as next month. Once that happens, the anxiety would settle as people would know that Franklin Templeton India has started disbursement.
As per SEBI regulations, the proceeds of the sale would first be utilised for the discharge of liabilities. The expenses connected with winding up would be met and after that the balance would be paid to the Unitholders. The Unitholders would be paid in proportion to their respective interest in the assets of the scheme.
Franklin Templeton India is a good example of how a company management can respond at the time of market crisis and trust erosion so that it can bounce back stronger than before.