SBI Fund Management seeks shield from liability in FTMF fund disbursement
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The Supreme Court has clarified that SBI Fund Management, and not SBI Mutual Funds, will be responsible for distribution of Rs 9,122 crore to unitholders of the six wound-up Franklin Templeton schemes. The SBI Fund Management also sought protection from any liability arising from the fund distribution exercise.
A bench comprising Justices S. Abdul Nazeer and Sanjiv Khanna allowed the SBI Fund Management to become a party in the case, as it clarified that there was a clerical error in the previous order which said that the SBI Mutual Fund will be the disbursing entity.
The petitioners' counsel, during the hearing, raised concerns on the distribution mechanism, and prayed before the top court that fund distribution should be done as per the Net Asset Value (NAV).
The top court noted that unitholder who are dissatisfied with wound-up schemes can raise their grievances on the next date of hearing on February 17. SBI Funds Management is the asset management company of SBI Mutual Funds, which sought the fund house should bear all expenses in connection with the distribution of funds.
SBI Fund Management moved the top court seeking its approval to disburse the funds among the unitholders of the mutual funds' schemes and also sought protection from any liability, which could arise out of the distribution exercise.
The petitioners' counsel contended before the top court that the asset management firm should move the SEBI, rather than approaching the court.
On February 2, the Supreme Court had directed Franklin Templeton Mutual Fund (FTMF) to distribute Rs 9,122 crore among unit-holders of the six schemes that were shut by the mutual fund house in April last year and said the distribution of funds need to be undertaken by the SBI Mutual Fund and completed within 20 days. The apex court had said the unit-holders should be repaid in proportion to their respective share in assets of the scheme and the distribution of funds would be undertaken by SBI Mutual Funds as agreed by both Franklin Templeton Trust and the Securities and Exchange Board of India.
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