No Mis-utilisation of Funds: Franklin Templeton MF Assures Unitholders

Franklin Templeton Mutual Fund shut six debt mutual funds on April 23 citing unfavourable conditions in the debt market due to the COVID-19 pandemic. Earlier, Economic Offence Wing (EOW) of the Chennai Police registered a first information report (FIR) against the fund house for an alleged criminal conspiracy to defraud investors.

In addition, the fund house said the press release issued by Chennai Financial Markets & Accountability (CFMA) citing the FIR, was replete with various misleading and baseless allegations. CFMA accused the fund house and its top management of conspiracy to defraud 3 lakh investors by causing wrongful loss to them and unlawful gain to themselves.

“Please do not believe un-substantiated rumours and baseless accusations. While we cannot comment on the FIR as we have not seen its contents,” Sapre said. “Since the business has been carried out in compliance with the applicable laws and all decisions were taken in the best interest of our unit holders, we are confident about the outcome of any true and fair investigation conducted in this regard,” he added.

The fund houses that the schemes under winding up had received over Rs 7,184 crore from maturities, prepayments and coupons since closure. In addition, four out of the six schemes are already cash positive. “These amounts have been generated without the ability to efficiently monetise the portfolio,” Franklin Templeton said. The fund house reiterated that it acted in the best interest of unitholders.

“Our focus remains on maximizing value for unitholders in these schemes and returning monies as soon as possible in accordance with the applicable regulations, subject to the decision of the Karnataka High Court,” Franklin Templeton said.