The Enforcement Directorate conducted raids on the premises of the former and present senior officials of Franklin Templeton Mutual Fund (MF), a mutual fund investment company.
As per reports, the investigating agency is conducting raids in six places in Mumbai and Chennai. The searches are being conducted at the Mumbai premises of Roopa Kudva, her husband Vivek, former CIO of Franklin Templeton Santosh Kamath, and ex CEO Sanjay Sapre.
Meanwhile, the spokesperson for the Franklin Templeton MF confirmed the ongoing ED action against the company and said that a detailed statement into the matter will be issued shortly.
What are the allegations against the CIO and other officers of Franklin Templeton?
In 2021, ED launched a money laundering investigation against Franklin Templeton and its officials on the basis on the case registered by the Economic Offences Wing (EOW) of Chennai Police.
A case of cheating against Franklin Templeton was registered by Chennai’s EOW after the company had come under the scanner for the sudden closure of six debt schemes in April, 2020.
It is alleged that Franklin Templeton had hatched a criminal conspiracy to dupe its investors for its own unlawful gains. Besides, the mutual fund company’s forensic audit had shown that its officials sold, their investments in mutual fund schemes just before their closure.
The six debt schemes that were closed suddenly had an estimated Rs 25,000 crore as assets under management (AUM). Till January 29, 2020 these six schemes had received total cash flows of Rs 14,391 crore from maturities, pre-payments and coupon payments since their closing down on April 24, 2020, reported PTI.
However, the investment strategy, code of conduct, redemptions of Franklin Templeton before announcing the closure of schemes and the role of the company’s board members as well as trustees while handling risk had already been under the scanner of the ED.
Later in June 2021 during the investigation, Roopa Kudva and her husband Vivek were found guilty of violating sections of prevention of fraudulent trading practices (PFUTP) by market regulator Securities and Exchange Board of India (SEBI). There were held guilty under sections related to unfair trading practices.
Following this, SEBI banned them from stock markets for one year. The market regulator also imposed a penalty of Rs 4 crore on Vivek Kudva and Rs 3 crore on Roopa Kudva, respectively, reported PTI.
