Franklin Templeton, SEBI put on notice by Madras HC

New Delhi, May 29

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Notices have been issued to crisis-hit Franklin Templeton Mutual Fund and SEBI by the Madras High Court 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, according to a statement.

It further said mutual funds and fund managers should be made to answer questions on their choice of investment, and compliance with regulatory and prudential norms, among others.

Last month, Franklin Templeton had closed six debt funds, citing redemption pressures and lack of liquidity in the bond markets. Since then, capital market regulator SEBI has asked the fund house on multiple occasions to focus on repaying the investors at the earliest.

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.

The high court took cognisance of the seriousness of the matter wherein the money of the common public, amounting to about Rs 28,000 crore, is at risk of getting wiped off and has asked SEBI to file a reply along with a status report on the actions taken by it, the CFMA said. — PTI