Franklin Templeton Mutual Fund (FT MF) has appealed to its investors not to believe 'unsubstantiated rumours and baseless accusations' levelled by an investor group called Chennai Financial Markets and Accountability (CFMA).
Last week, CFMA issued a press release that said the Economic Offences Wing (EOW) of Chennai police had registered a first information report (FIR) against the fund house and its top executives. The press release notes that the FIR is based on a complaint filed by the CFMA in May this year for allegedly defrauding the unitholders stuck in its six debt schemes that are under the winding up process.
Commenting on the press release by CFMA, FT MF President Sanjay Sapre wrote, “While we (FT MF) cannot comment on the FIR as we have not seen its contents, it may be noted that filing of an FIR is simply the preliminary step in an investigation. Since the business has been carried out in compliance with the applicable laws and all decisions were taken in the best interest of our unit holders, we are confident about the outcome of any true and fair investigation conducted in this regard,”.
FT MF's communication to investors further claimed that CFMA has previously made similar misleading and baseless allegations against it and the industry – for example, suggesting that unitholders in the scheme may face up to an 80% haircut, or that winding up of schemes by Franklin Templeton will lead to substantial losses for unitholders across all debt schemes in the industry.
"Please do not believe unsubstantiated rumours and baseless accusations. We request you not to be swayed by unverified or speculative reports," Sapre wrote to FT investors.
Recently, Karnataka High Court has completed hearing the arguments on matters related to the six schemes under winding-up. FT MF said that their focus remains on returning money as soon as possible in accordance with the applicable regulations, subject to the decision of the
Karnataka High Court.
