CFMA says Franklin Templeton knows of FIR; to file class-action suit

Chennai, Sep 26 (IANS): The Chennai Financial Markets and Accountability (CFMA) investors' group on Saturday said intimation regarding registration of a first information report (FIR) by the Economic Offences' Wing (EOW) Chennai against Franklin Templeton (FT) India, was made by its counsel before the Karnataka High Court where even legal advisors, counsels and representatives of FT Mutual were present.

"Therefore, claiming ignorance of FIR by Franklin Templeton India is one more attempt to misguide unitholders and media too," stated CFMA. The EOW, Chennai, has registered an FIR against Franklin Templeton India, its trustee company, and senior management, including the fund manager, for allegedly defrauding 300,000 unit holders stuck in its six shut debt schemes. The FIR is based on a complaint filed by the CFMA in May this year.

The investor's group pointed out that a convenient stand of COVID-19 is being taken consistently to hide malafide investment decisions. "How is it that COVID-19 has affected only six debt schemes of FT Mutual Fund (FTMF)? How has the very same COVID-19 not impacted the other schemes of FT Mutual Fund? A pandemic has an industry-wide impact," it noted.

Earlier this year, Franklin Templeton had closed six debt funds, citing redemption pressures and a lack of liquidity in the bond markets. Capital market regulator SEBI had subsequently asked the fund house on multiple occasions to focus on repaying the investors at the earliest. These schemes had an estimated Rs 28,000 crore of investors' money.

Since April 2020, the unit holders are being misguided that the winding-up is in their interest. However, no information has been provided on the present value of investments and as to by when the unit holders shall be repaid. The unit holders have been left in the lurch, said the CFMA. Notably, till now FT Mutual Fund has not refuted that Rs 20,000 crore of principal amount will be wiped off as head cut out of a total of about Rs 26,500 crore invested by over three lakh unit holders.

FTMF has been claiming about paying back to investors without disclosing the loss to unit holders or explaining how such loss can be suffered by investors when they invested money in debt bond and not junk bond, the investors' group added. If no crimes have been committed in an investment decision, the CFMA asked, then why is FTMF not putting the Forensic Audit Report in the public domain?

CFMA said it is committed for fighting the cause of unit holders and such misleading statements by FTMF will not stall its commitment.

Meanwhile, in a statement, CFMA has said it is contemplating filing a class-action suit against the global fund house for recovery of money and to claim damages. It urged all aggrieved investors to come together for filing the class-action suit. It also asked all investors to file their complaints to the Economic Offences Wing of Chennai Police, so that all the pleas can be collectively pursued in the Madras High Court, where the investors' body has already been fighting this case.



Title : CFMA says Franklin Templeton knows of FIR; to file class-action suit


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