Franklin Templeton ‘disagrees’ with findings in Sebi order, to move SAT

Reacting to the adjudication order by Sebi penalising the top management in the Franklin Templeton case, the fund house has said that the ‘disagree’ with the findings in the SEBI order. Franklin spokesperson said that the fund house intends to file an appeal with the Hon’ble Securities Appellate Tribunal.

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“At Franklin Templeton, we place great emphasis on compliance, and have policies in place to cover a variety of matters consistent with applicable regulations and global best practices. We believe the company and employees have acted in compliance with regulations and in the best interest of unitholders in discharging their responsibilities. Based on our initial review of the order, we are considering all options with regard to next steps which may include filing an appeal before the Hon’ble Securities Appellate Tribunal (SAT),” the Franklin spokesperson said.

“As stated previously, the decision to wind up the schemes was a result of the severe market dislocation and illiquidity caused by the COVID-19 pandemic. The difficult decision to wind up these schemes was taken after due consideration of available options to avoid distressed sales of portfolio holdings to meet heightened redemptions and with the sole objective of preserving value for unitholders,” the Franklin spokesperson said.

The fund house said that the current net asset value of each of the six schemes is higher than it was on April 23, 2020. Franklin says that this supports the decision to wind up the six schemes. The six schemes under winding up have already distributed INR 17,778 crores to unitholders, comprising 71% of the AUM of INR 25,214 crores on the date of the winding up decision. Of the above, INR 3,205 crores was paid out just last week. The process of monetisation and distribution is ongoing.

The spokesperson said that, “The Trustee’s immediate priority and focus remains on supporting the liquidation of the portfolios of the six schemes under winding up and distributing monies to our unitholders at the earliest, while preserving value.”

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