Franklin Templeton MF and SEBI issued notice by Madras High Court

Last month, Franklin Templeton had closed six debt funds, citing redemption pressures and lack of liquidity in the bond markets in India owing to the nationwide lockdown. Shortly after, capital market regulator Securities and Exchange Board of India (SEBI) has asked the fund house on multiple occasions to focus on repaying the investors at the earliest.

The Madras High Court has issued notices to Franklin Templeton Mutual Fund and SEBI after a petition was filed by an investors group to safeguard nearly Rs. 28,000 crore of investors’ money stuck in six schemes shut down by the fund house.

Chennai Financial Markets and Accountability (CFMA) – the investors’ group, is said to be separately launching an online petition to collectively bring all affected investors. They plan to forward the same to the Prime Minister’s Office and the United States (US) parent of the fund house and the US markets regulator Securities and Exchange Commission (SEC).

According to the CFMA, the Madras High Court issued notices on May 26 to SEBI, Franklin Templeton Asset Management India Pvt Ltd (FTAMC), trustees of the mutual fund, its president Sanjay Sapre, fixed income CIO Santosh Kamath and other key management personnel after a PIL was filed by it. CFMA further stated that the Madras High Court has taken cognizance of the gravity of the matter as the money of the common public, amounting to about Rs. 28,000 crore is involved and is at risk of getting wiped off. The Court has asked SEBI to file a reply along with a status report on the actions taken by it.