InvestorQ : Is it true that there have been no adverse findings in the money laundering case registered against Franklin Templeton?
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Is it true that there have been no adverse findings in the money laundering case registered against Franklin Templeton?

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Rashi Mehra answered.
3 months ago
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Let me clarify that there is no clean chit coming from any of the authorities. It is just that Franklin Templeton Mutual Fund has claimed that there were no adverse findings against it or its employees just a few days after the ED registered a money laundering case and SEBI sent a show-cause notice on lapses. However, there is no clean chit that has come either from the SEBI or from the ED.

One of the major allegation was that many of the key management personnel or KMPs had redeemed their units in these debt funds just ahead of the decision to freeze the funds knowing fully well of the decision and its consequences. That is what really raises a cloud over the entire story. Templeton has claimed that it has filed a detailed response to the show-cause notice issued by SEBI about KMP activity ahead of the announcement.

It may be recollected that Templeton had suddenly decided to shutter its six debt schemes in April 2020 without any warning allegedly due to severe market dislocation and illiquidity caused by COVID-19 pandemic. Sanjay Sapre has admitted that personal redemptions by key insiders ahead of the winding-up decision were under review and that a detailed response would be also made available to SEBI on this subject.

The only thing that Franklin Templeton has been able to confirm is that to date, there have been no adverse findings against Franklin Templeton or its employees or management. But then, these are early days still. Franklin has also clarified that the standard operating procedure or SOP for the monetisation of assets under winding up and distribution of the proceeds to shareholders had been finalized in association with SBI Mutual Fund.

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