InvestorQ : What is the meaning of the ultimatum given by the Supreme Court to Templeton Funds to seek unit holder approval for winding up?
Archita Jajjoo made post

What is the meaning of the ultimatum given by the Supreme Court to Templeton Funds to seek unit holder approval for winding up?

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Niti Shenoi answered.
3 months ago
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Supreme Court has instructed Franklin Templeton Fund to initiate steps within 1 week to call a meeting of unit holders and seek consent for closure of six MF scheme. SC refused permission for redemptions without unit holder consent.

On October 24, Karnataka High Court had barred Templeton from winding up the 6 schemes unless the consent of the unit holders was obtained. Franklin Templeton MF closed these six schemes on April 23 citing redemption pressures.

A fund has to first become cash flow positive, i.e. repay any borrowings, before redemption / winding up can be taken up. There are currently 4 cash positive schemes out of 6 and the cash available stands at Rs.5952 crore. Fund management expenses are to be adjusted. Clearly, the unit holders need to take a big haircut anyways.

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