CHENNAI: The Madras High Court on Saturday ordered the Economic Offences Wing (EOW) of the State police to file a detailed report on a plea seeking criminal action against Franklin Templeton under the Tamil Nadu Protection of Interests of Depositors (TNPID) Act, and to freeze its bank accounts.
The issue pertains to the company winding up six of its mutual fund (MF) schemes, affecting over three lakh investors to the tune of Rs 28,000 crore, owing to the recent pandemic. The six debt MF schemes were shut on April 23, 2020, citing redemption pressures and lack of liquidity in the bond market.
The schemes are Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund, and Franklin India Income Opportunities Fund.
The petitioner, Premnath Shanker, a banker, wanted the court to direct the EOW to file a status report on the steps taken to secure the investor money. “...the fraud committed by the company has resulted in a loss of about Rs 28,000 crore to as many as 3,15,621 depositors. In a case of this magnitude and considering the background of the company, it was just and necessary to include the offence under the TNPID Act,” the petitioner contended.
He added that an FIR was also filed under Sections 409, 420, 120-B, 34 of IPC, based on his complaint.
The first bench of Chief Justice Sanjib Banerjee and Justice Senthilkumar Ramamoorthy, admitting the plea, directed the EOW to respond to the plea in four weeks. The EOW of the Chennai police had registered an FIR against the Asset Manager and Franklin Templeton Trustee Services for alleged criminal conspiracy to defraud over 3 lakh investors, causing wrongful loss to them and unlawful gain to themselves.