Franklin Templeton’s in the dock, but is SEBI blameless?
The regulator’s failure to act in time against the fund house has resulted in investors turning to the courts for redress.
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Editor's note: Nine months on, 315,600 mutual fund investors in Franklin Templeton India are exactly where they were on 24 April 2020, when the asset management company decided to shut down its suite of six debt mutual fund schemes. The schemes, with assets under management of just under Rs 25,900 crore, remain closed for redemptions under the so-called winding up process, which entails selling and monetization of underlying bonds to make payment to investors. So far, the AMC, the regulator and the courts have given no indication of when investors will get back their money. Clarity may emerge on Monday when the Supreme Court is expected to finalize the road ahead, with investors voting in favour of winding up the schemes. (Over 96% of investors who voted were in favour of winding up; but only 38% of all unitholders actually participated in the voting process.) Meanwhile, the six schemes continue to receive cash flows. Between 24 April 2020 and 15 January 2021, they have received Rs 13,789 crore from maturities and prepayments of the underlying bonds. So, after the intervention of five …
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