The Securities Appellate Tribunal (SAT) has given an interim relief to US-based Franklin Templeton from order of Securities Board Exchange of India (SEBI) restraining it from launching debt schemes for the next two years.
Within two weeks, FT has to deposit ₹250 crore into an interest bearing Escrow Account, as demanded by SAT. The tribunal has the amount disgorged to ₹250 crore as ₹512 crore was ‘excessive’. In addition, the details of such account shall be submitted to the regulatory body SEBI. The tribunal stated orally that consequently, the ₹5 crore penalty would be stayed. The order will be available on the website soon.
The petition was filed by FT challenging SEBI’s order that prohibited the multinational holding company from launching new debt schemes for two years as well as imposing a ₹5 crore fine. Furthermore, it called for the refund of investment advisory and management fees collected for the six closed debt schemes.
While opposing the disgorgement, FT has also said that the returns on the funds overtook those of the indices and had been beneficial to investors. It continued saying that the half of the investors institutions and not a single complaint had been filed against the fund house till the schemes were closed.
According to SEBI, FT had failed to compile with its rules and circulars. Moreover, its directives were forensic reports-based and it had also sought the views of Franklin Templeton.
SEBI is needed to file its reply in four weeks along with a rejoinder by Franklin Templeton in three weeks.
SAT will hear the matter next on 30th August only when it is scheduled to proceed with its final order after hearing both sides.
