Franklin Templeton allowed to offer new debt schemes by SAT

Asking the fund house to disgorge ₹512 crores along with restraining it from launching debt schemes, partial relief to Franklin Templeton has been given by The Securities Appellate Tribunal from the Securities and Exchange Board of India’s order. Saying that ₹512 crore was excessive, the tribunal cut the amount to be disgorged to ₹250 crores, in an interim order and asked the FT to deposit ₹250 crores in an escrow account.

An order that restrained FT from allowing the fund house to launch them and offer new debt schemes was being stayed by SAT. The final order in the case after hearing both the parties shall be passed on 30th August when the tribunal will next hear the matter. After hearing arguments from both ends, SAT had reserved its interim order on 25th June.

It was contended that SEBI’s order earlier this month banning FT from the launch of any debt scheme for around two years which was against the principles of natural justice by Franklin Templeton which wound up six debt schemes in the previous year.

The investment management and advisory fee collected for the six schemes was asked by the regulator to be refunded and had also imposed a penalty on the fund house.

The returns on the funds exceeded those of the indices along with having benefited investors and also mentioned that around half of the investors were institutions while they had not filed a single complaint against the fund house until the schemes were closed, as stated by the FT opposing the disgorgement.

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