Franklin Templeton Mutual Fund will approach the Securities Appellate Tribunal (SAT) against the SEBI order.
The decision was made after SEBI imposed a fine of Rs.5 crore on the fund house for violation of SEBI norms. The market regulator has also asked the fund house to refund fund management fees of up to Rs.512 crore to unitholders of the wound up schemes. Further, SEBI has also barred the fund house from launching new debt schemes for two years.
In a statement issued by the company, the fund house said, “We strongly disagree with the findings in the SEBI order and intend to file an appeal with the Hon’ble SAT. 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 pandemic and was taken with the sole objective of preserving value for unitholders.”
In another development, Vivek Kudva, Head of Asia Pacific Distribution, Franklin Templeton said that he will also appeal before SAT against SEBI order.
SEBI has imposed fine of Rs.7 crore and one year ban on Vivek Kudva and Roopa Kudva. In his statement, Kudva said, “I have the highest regard for SEBI. However, I am reviewing the order and considering appropriate next steps which may include filing an appeal before the Hon’ble SAT. I have always acted in accordance with SEBI regulations, including in this instance. My personal transactions in the two schemes (under winding-up) have been conducted in good faith and with no intent to gain unfair benefit. As stated in the SEBI order, I had already placed myself in a similar position as investors in April 2020 and the proceeds of the redemptions were voluntarily set aside such that I and my family will ultimately receive no more than the investors remaining in the schemes. My interests therefore remain fully aligned with outcomes that investors in the two schemes under winding up will have.”
The fund house said, “Mr. Vivek Kudva, Head of APAC Distribution, has issued a statement and we have nothing further to add at this time. At Franklin Templeton, we place great emphasis on compliance, and have policies in place to cover a variety of matters including personal transactions of employees and managing conflicts of interest, consistent with applicable regulations and global best practices. The schemes under winding up continue to have significant investments from employees and management, as well as from the asset management company and other group companies of Franklin Templeton.”
