Defending its investment decisions, Franklin Templeton India has said that its investment management team takes the call on the basis of various factors and options with a view of maximising recovery of investment proceeds and getting the best outcome.
In a letter to the investors on the six shut schemes, Sanjay Sapre, President of Franklin Templeton Asset Management (India) Pvt. Ltd, also noted that employees who made investments in the six schemes continue to hold substantial investments in these schemes.
“The decision to exercise, or not to exercise a ‘put’ option rests with the investment management team. The team takes various factors and options into account in order to maximise recovery of investment proceeds when making such an investment related decision and exercising a put is not the only available option,” he said.
“All such decisions are taken with an aim to achieve the best possible outcome for our investors. Some reports specifically call out investments made in certain issuers where we did not exercise a put option. However, these reports ignore the fact that Franklin Templeton has already initiated legal recovery proceedings in the case of some of these issuers,” Sapre wrote in the letter.
On the reports on wrongdoings citing the forensic audit report, Sapre said that the reports are misleading and the report is subject to modification basis explanations and responses to be provided by Franklin Templeton.
He also said that from April 24 till September 30, 2020, the total cash received from maturities, pre-payments and coupons across the six schemes stands at Rs 8,262 crore.
Part of the received amount has been utilised to repay borrowings and post repayment, as of September 30, 2020, the company has Rs 5,084 crore available for distribution to unit holders in four cash positive schemes — Franklin India Ultra Short Bond Fund, Franklin India Dynamic Accrual Fund, Franklin India Low Duration Fund, Franklin India Credit Risk Fund — subject to fund running expenses.