New Delhi, June 14 In yet another blow for Franklin Templeton Mutual Fund, the SEBI has now imposed a penalty on Franklin Templeton Trustee Services and the head of India operations, Sanjay Sapre among other key officials in the matter of winding of six debt schemes last year.
The capital market regulator on Monday imposed a penalty of Rs 3 crore on Franklin Templeton Trustee Services and a Rs 2 crore penalty on Franklin Templeton Asset Management (India) Pvt Ltd CEO Sapre.
CIO Santosh Kamat, Chief Compliance Officer Saurabh Gangrade, along with fund managers Kunal Agarwal, Pallab Roy, Sachin Padwal Desai and Umesh Sharma, have also been fined. Former fund manager Sumit Gupta has also been penalised.
The SEBI order said: "There is also no material made available on record to assess the amount of loss caused to investors or the amount of disproportionate gain or unfair advantage made by the noticees as a result off default."
It noted that the consequences resulting from violations committed by the noticees are of serious nature and are prejudicial to the interests of investors in the securities market. If violations of this nature and magnitude are not dealt with seriously with a firm hand then investors will lose faith in the Indian securities market, the SEBI said.
A Franklin Templeton spokesperson said that the asset management company is considering several options, including approaching the Securities Appellate Tribunal (SAT).
"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," the spokesperson said on the allegations against and penalty on its employees including the CEO.
The trustee, in a statement, said that it also intends to file an appeal with the SAT.
"We place great emphasis on compliance and believe we have always acted in the best interest of unitholders and in accordance with regulations. 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," it said.
"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."
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