Franklin Templeton to challenge Sebi order in Securities Appellate Tribunal

Franklin Templeton to challenge Sebi order in Securities Appellate Tribunal

In response to the final report submitted by the Securities and Exchange Board of India in the matter of the shutting down of six Franklin Templeton schemes, the fund house has responded by saying that they will challenge the SEBI order in the Securities Appellate Tribunal.

“We strongly disagree with the findings in the SEBI order and intend to file an appeal with the Hon’ble Securities Appellate Tribunal. We place great emphasis on compliance and believe that we have always acted in the best interest of unitholders and in accordance with regulations. Our commitment to India remains steadfast. As stated previously, the decision by the Trustee in April 2020 to wind up the funds was due to the severe market dislocation and illiquidity caused by the COVID-19 pandemic and was taken with the sole objective of preserving value for unitholders,” Franklin Templeton said in a statement.

The Securities and Exchange Board of India today, banned Franklin Templeton Mutual Fund from launching new debt mutual fund schemes for the next two years. Sebi communicated this via the final order in the investigation in the shutting down off six debt mutual funds. The regulator has further imposed a monetary fine of Rs 5 crore on the fund house.
Read more: Franklin Templeton barred from launching new schemes, Kudwa penalised by Sebi

The fund house also said that the six schemes under winding up have distributed INR 14,572 crores to unitholders as of April 30, 2021 and an amount of INR 3,205 crores is available for distribution as of June 4, 2021. After this distribution in the first week of June 2021, the total amount disbursed will range between 40% and 92% of AUM as of April 23, 2020 across the six schemes. Franklin Templeton added that the immediate priority and focus remains on supporting the court appointed liquidator in liquidating the portfolio of the schemes under winding up and distributing monies to our unitholders at the earliest, while preserving value.

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