NEW DELHI: After market regulator SEBI issued show-cause notices to Franklin Templeton Mutual Fund and its officials over risk management practices and personal transactions by employees and management, the company’s president said that so far there have been no adverse findings against the fund house or its employees or management.
Franklin Templeton MF had closed down six debt funds in April last year citing redemption pressure and lack of liquidity in the bond market.
SBI Funds Management, the Supreme Court-appointed liquidator, is currently in the process of preparing to liquidate the schemes under winding up and distribute proceeds to unitholders at the earliest opportunity, the company said.
Sanjay Sapre, President of Franklin Templeton Asset Management (India) Pvt Ltd, said in a letter to investors that since these issues remain under regulatory review, the firm was “constrained from commenting on specific details at this juncture”.
“But we can confirm that to date, there have been no adverse findings against Franklin Templeton or its employees or management,” he wrote.
According to Sapre, the asset management company has submitted detailed responses to show-cause notices issued by SEBI.
Regarding accusations that certain employees had made personal redemptions before the six schemes had been wound up, Sapre said that the redemptions are under review and that those individuals have cooperated fully with the process.
They have submitted detailed responses to Sebi, which are under consideration, he said.
“We cannot go into detail of our responses, but we believe that we acted in compliance with applicable regulations and rules and that we have strong defenses to the allegation,” Sapre wrote.
“The schemes under winding up continue to have significant investment from employees and management of Franklin Templeton (as well as from the asset management company and other group companies of Franklin Templeton),” he added.