SEBI best placed to probe MF-related issues: Franklin Templeton

Calling the recent FIR by Chennai Financial Markets and Accountability (CFMA) against Franklin Templeton India, the fund house has said the Securities and Exchange Board of India (SEBI) was best placed to handle any issue related to mutual fund investments.

In a letter to the investors, Sanjay Sapre, President of Franklin Templeton Asset Management (India) Pvt. Ltd, however, said the company has not seen the contents of the FIR.

He noted that since the business has been carried out "in compliance with the applicable laws" and all decisions were taken in the best interest of the unit holders, the company was confident about the outcome of any true and fair investigation conducted in this regard.

"We have the utmost respect for all statutory authorities, including EOW. However, we believe that Securities and Exchange Board of India (SEBI), the specialized regulator for the securities market, is best placed to handle any issues related to mutual fund investments," the letter said.

Sapre said the press release by CFMA citing the FIR is replete with various misleading and baseless allegations, besides being inappropriate, as the matter is currently sub-judice.

"We are not aware of the antecedents of CFMA and as admitted by them in their original complaint, none of their members were unit holders in the six impacted schemes," he added.

He said mutual funds are well-regulated and assets of these schemes were held with independent SEBI-registered custodians. Portfolios of these schemes retain value according to their respective NAVs which are published daily, based on the valuation of two reputed independent valuation agencies, he added.

"We have already communicated the reasons for winding up (specifically the impact of the Covid-19 pandemic) and request you not to be swayed by unverified or speculative reports in the media," the letter said.

He also said CFMA had previously made similar misleading and baseless allegations against the company and the industry.

He noted that since April 24, 2020, the schemes under winding up have received more than Rs 7,184 crore from maturities, pre-payments and coupons and four out of the six schemes were already cash positive.

Last week, the Economic Offences Wing (EOW) of the Chennai police registered a first information report (FIR) against Franklin Templeton Asset Management India Pvt. Ltd (FTAMIL) and Franklin Templeton Trustee Services Pvt. Ltd. (FTTSPL) for allegedly hatching a criminal conspiracy to defraud three lakh investors by causing wrongful loss to them and unlawful gain to themselves by committing various offences under the IPC.

The EOW registered the FIR after investigating a complaint filed by CFMA, the investors' group and a few others with EOW in Chennai in May this year in the interest of millions of aggrieved investors of Franklin Templeton whose more than Rs 28,000 crore were stuck because the fund house abruptly closed down its six debt schemes in April this year..