Franklin Templeton Asset Management (India) Pvt. Has warned investors of potential losses if they vote against its plan to liquidate more than $ 4 billion in debt funds that it froze earlier this year.
Electronic voting will take place December 26-28 on the asset manager’s plan, according to a company statement Monday.
Franklin is seeking a simple majority shareholder consent on his proposal to liquidate six plans that he had closed in April, which they locked in at Rs 30,800 crore ($ 4.2 billion) in the largest forced closure of funds ever made in India.
The country’s high court asked the asset manager on December 3 to initiate steps to meet with shareholders in a week as it agreed to hear Franklin’s appeal against a lower court verdict that had blocked the liquidation of the assets. debt funds without the consent of the investor.
If investors reject the resolution, the closed funds “should be reopened immediately and may require an emergency liquidation of securities, if a high volume of redemption is received,” Franklin said in the statement. “This may involve distressed sales of securities to meet the refunds received.”
The Supreme Court is expected to hear the case on December 9.
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