No plans to exit India business, clarifies Franklin Templeton

The fund house had threatened to exit India over Sebi probe into its debt schemes

NEW DELHI: Franklin Templeton has no plans to exit its India operations, Sanjay Sapre, the president of the fund house’s India business said in a letter issued on Friday.

Franklin Templeton is a US-headquartered global asset manager with $1.5 trillion in assets under management. Media reports recently suggested it had sought discussions with the Indian ambassador to the US over a Sebi (Securities and Exchange Bureau of India) investigation into six Indian debt schemes it wound up in April 2020. According to the reports, Franklin Templeton had threatened to exit India if it was not given a fair hearing.

“We were early entrants in the Indian mutual fund industry and have remained a part of the industry even while many other global asset managers decided to leave,” Sapre said in the letter to investors.

“Please let me assure you, we have no plans to exit our India business. Any speculation suggesting otherwise, or any rumours around sale of our business in India are incorrect and simply that—rumours.”

However, the letter did not deny reports of discussions with Indian authorities. “Our engagement with government authorities, in India and globally, is also something we, and many companies do, as a matter of course.

We have endeavored to keep all stakeholders, including the relevant government and diplomatic authorities, appropriately informed of developments, and will continue to do so,” it said.

The letter said the fund house had the “greatest respect” for and “full confidence” in Sebi. The NAVs (net asset values) of all six schemes exceeded their closing value on April 23, 2020, and all the schemes are now cash positive, it said.

The fund house manages around ₹60,000 crore of assets in India (as of February 2021). Nearly ₹1,874 crore of cash is available for distribution to investors from the six schemes as of March 31. Around ₹9,122 crore was distributed to investors in February 2021.

The Supreme Court had appointed SBI Funds Management Pvt. Ltd in February to oversee the winding up of the six schemes.

Last month, SBI MF submitted a standard operating procedure (SoP) to the court for disposal of the Franklin assets. The letter added that Franklin has directed its efforts to “supporting SBI Funds Management Pvt. Ltd (SBI MF), the liquidator appointed by the SC, in monetising the portfolios of these schemes and returning monies to investors at the earliest, while preserving value.”

Franklin Templeton Mutual Fund said its six shut schemes have received ₹15,776 crore from maturities, pre-payments and coupon payments since closing down in April, 2020.

The schemes — Franklin

AIndia 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 — together had an estimated ₹25,000 crore as assets under management.

PTI contributed to this story.

BLOOMBERG However, the fund house did not deny reports of discussions with Indian authorities, and said it had the ‘greatest respect’ for and ‘full confidence’ in Sebi.