Franklin Templeton said Ms Johnson gave a general background of the fund house's experience in India
- "Working closely with the Trustees, the firm is committed to ensuring an orderly and equitable exit for all investors at the earlier possible time," Franklin Templeton said on Friday.
- The statement from Franklin Templeton a day after SEBI rebutted claims that tighter rules pushed the US-based fund house into freezing the six debt funds last month, and said the asset manager should focus on returning the $4.1 billion to investors.
- News agency Bloomberg had earlier quoted Franklin Templeton's global CEO Jennifer Johnson as saying at a post-earnings conference call that the country's new rules on investment in unlisted debt had orphaned a third of their funds as these bonds could no longer be traded.
- The new regulations were enforced after the collapse of a major infrastructure financier in September 2018, SEBI said on Thursday. The regulator also said the rules were created by a committee that included representation from Franklin Templeton.
- In its statement on Friday, Franklin Templeton said that Ms Johnson, while responding to a question regarding the closure of the schemes, had provided general background of the company's experience in the country's market before the onset of the COVID-19 outbreak.
- Franklin Templeton said the CEO was quoted out of context and this had diluted the essence of her responses. "This is neither factually correct nor substantiated by the comments made during the conference," Franklin Templeton said in the media release.
- Franklin Templeton went on to clarify that the primary reason for the winding up of the schemes was the severe market dislocation caused by the COVID-19 pandemic and the related lockdown, which had led to severe market illiquidity and increased redemptions.
- In its April 23 statement, the US-based fund house said it had wound up six funds "to protect value for investors via a managed sale of the portfolio". The funds were 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.
- Days later, the Reserve Bank of India (RBI) announced a special liquidity facility worth Rs 50,000 crore for mutual funds in a bid to ease liquidity pressures in the sector as well as lift investors' confidence. The RBI mentioned heightened volatility in the country's capital markets in reaction to the COVID-19 outbreak, having imposed liquidity strains on mutual funds.
- The country remained in the third phase of a nationwide lockdown to curb the spread of the coronavirus pandemic.
