The Securities Appellate Tribunal (SAT) has stayed the Securities and Exchange Board of India’s (Sebi) ruling prohibiting Franklin Templeton Asset Management (India) from launching any new debt plan for two years.
In addition, the regulator had asked Franklin Templeton to refund investment management and advisory fees to the tune of Rs 512 crore, including interest, collected with respect to its six debt schemes which are now shut.
“As a result of the irregularities in the running of the debt schemes inspected, loss has been caused to the investors. The noticee (Franklin Templeton AMC) was under a statutory obligation to abide by the provisions of the Mutual Regulations and Circulars issued thereunder, which it failed to do,” Sebi had said.
“With reference to the order issued by Whole Time Member(WTM) of Sebi on June 7, 2021, Franklin Templeton Asset Management (India) Pvt Ltd filed an appeal and an application for stay before the Hon’ble SAT. After hearing the parties, the Hon’ble SAT has stayed the operation of the order passed by the WTM,” a Franklin Templeton spokesperson said in a statement.
The schemes — 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 — together had an estimated Rs 25,000 crore as assets under management.
Subsequent to the decision to wind up the schemes, Securities and Exchange Board of India (Sebi) ordered a forensic audit and appointed Chokshi and Chokshi LLP, Chartered Accountants to conduct a forensic audit of Franklin Templeton MF, Franklin Templeton AMC, and trustees, particularly in respect to the six debt schemes.
