The Securities and Exchange Board of India has imposed a Rs 15 crore fine on nine entities, including Franklin Templeton Trustee Services, some senior officials and fund managers. SEBI has fined Rs 3 crore on Franklin Templeton Trustee Services Pvt. Ltd and Rs 2 crore on Franklin Asset Management (India) Pvt. Ltd.
Also: SEBI’s order on June 7 against Franklin Templeton
Other delicates fined by SEBI are namely, Kunal Agarwal, Sumit Gupta, Pallab Roy, Sachin Padwal Desai and Umesh Sharma. They were imposed Rs 1.5 crore each. They were the fund managers of various Franklin Templeton schemes. Former chief compliance officer Saurabh Gangrade was also pressed for Rs 50 lakh.
In the SEBI order it was mentioned that, the serious lapses and violations clearly appear to be a fallout of the FT-MF’s obsession to run “high-yield strategies” without due regard from the concomitant risk dimensions, also it stated that, “For a fund house which have been in this industry of India for over two and a half decades, its surprising that the systems have to monitor and manage critical risks like liquidity, credit and concentration are less than robust. The effectiveness of these systems stand compromised in the process of the notices for a single minded pursuit of reaping high yield.”
SEBI has directed the first round of penalties to the fund house in its last week order, although in today’s order it is directed at the individuals at leading of affairs at the fund house.