Markets regulator SEBI has imposed a total fine of Rs 15 crore on American mutual fund house Franklin Templeton and eight other associate companies and executives associated with the company. This fine has been imposed on Franklin Templeton for negligence in its premature closure and for ignoring the critical risk with violation of rules.
SEBI has imposed a fine of Rs 3 crore on Franklin Templeton Trustee Services. Along with this, a fine of Rs 2 crore each has been imposed on Franklin Templeton Asset Management Company (FT-AMC) President Sanjay Sapre and Chief Investment Officer Santosh Kamat.
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Apart from this, SEBI imposed a fine of Rs 1.5 crore each on Kunal Agarwal, Sumit Gupta, Pallava Roy, Sachin Padwal and Umesh Sharma, who were fund managers in various schemes of Franklin Templeton. Whereas former Chief Compliance Officer Saurav Gangrade was fined 50 lakhs. SEBI said that the mutual fund house ignored the liquidity risk and credit risk only to take advantage of the high yield.
Last week, SEBI barred former Franklin Templeton Asia Pacific CEO Vivek Kudva and his wife Roopa Kudva from accessing the securities market for a year. Roopa Kudva is the former Managing Director of Omidyar Network India. Both these husband and wife will no longer be able to trade in the security market for one year.
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SEBI, along with banning Vivek and Roop Kudva, had ordered both to deposit the redeemed Rs 30.70 crore of Franklin Templeton units (FT units) within 45 days in an Escrow account. Along with this, a fine of Rs 4 crore has been imposed on Vivek Kudva and Rs 3 crore on his wife Roopa Kudva.
Along with this, SEBI has banned Franklin Templeton Asset Management Company (FT-AMC) from launching any new debt scheme for 2 years. The company will not be able to launch any new debt scheme for 2 years. Also, last year, a fine of Rs 5 crore has been imposed for closing 6 debt mutual funds schemes and breaking the rules.
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SEBI said that investors have suffered losses due to irregularities in running the debt scheme and violation of law. The company has violated sections 15A(b), 15D(b), 15D(f), 15E and 15HB of the SEBI Act, for which a fine of Rs 5 crore has been imposed on FT-AMC.
SEBI has ordered everyone to pay the fine within 45 days. SEBI said that the top management, including the CEO of Franklin Templeton Asset Management Company, is responsible for the loss caused to investors due to breach of rules and premature closure of the 6 debt scheme. SEBI has started the process of action against the employees of FT-AMC.
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