InvestorQ : What does the winding up vote by the unit holders of Templeton Mutual Fund actually mean?
sarah Leo made post

What does the winding up vote by the unit holders of Templeton Mutual Fund actually mean?

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Rashi Mehra answered.
4 months ago
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During the court announced that as per the vote results submitted to them by the observers, the vote has bene 96% in favour of winding up the six schemes. To be fair, the unit holders did not have much of a choice as that was the only way to get some of the money back, although they would still have to take a haircut.

It may be recollected that back in April 2020, Templeton stopped fresh purchase and redemptions in six of their debt funds. The real reason was that some investors sensed that the portfolio of these funds was a huge mess of illiquid bonds. When redemption pressure built up, the fund did not have the ability to redeem and it shut the redemption window locking up Rs.28,000 crore of unit holder funds.

It may be recollected that the court ordered that winding up cannot happen without the consent of unit holders. Thus, the fund put the onus on unit holders to either vote in favour of winding up or bid farewell to their money. It was like Templeton not really giving a choice and in the circumstances the unit holders opted for the best choice.

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