Mumbai: Investors in Franklin Templeton's six schemes that were shut down last month may have to wait for years to get their returns back.
In April, Franklin Templeton shut down schemes such as Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunities Fund with immediate effect.
Back then, the company said, "there has been a dramatic and sustained fall in liquidity in certain segments of the corporate bonds market on account of the Covid-19 crisis and the resultant lock-down of the Indian economy which was necessary to address the same. At the same time, mutual funds, especially in the fixed income segment, are facing continuous and heightened redemptions."
On Tuesday, a Bloomberg report quoting mails exchanged between an asset manager and investors said the wait-time could be as high as five years. The report said returns in four of the funds could take over five years while the remainder could get investors their money within five years. Investor approval for liquidation was still awaited.
The total assets under management of the six schemes was reported at upwards of Rs 26,000 crores.
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Ten days ago, market regulator SEBI in an advisory asked Franklin Templeton to focus on returning money to investors. The regulator also highighted the constitution of various working groups to address issues in corporate bond markets, transparency and disclosure of investments in debt securities made by mutual funds with money entrusted to them by investors.