Franklin Templeton case: Karnataka HC sets aside judgment

The Karnataka High Court (HC) has deferred its judgment in the Franklin Templeton Asset Management (India) case on Monday, with the HC passing an order to take on record duly notarised copies of affidavits filed by the asset manager (e-filed originally), according to the standard operating procedure of the court, said a person familiar with the matter.

The case against the asset manager was filed by a few unitholders of the six debt schemes that were shut in April. According to reports, the court may have examined whether Franklin followed the right processes to shut down the scheme. The findings of the Securities and Exchange Board of India’s forensic report on the six debt schemes may also have been taken into consideration.

The verdict could determine how swiftly the money stuck in the six shut schemes would be repaid to the unitholders.

The asset manager said last week that its six shut schemes had received ~8,262 crore from maturities, prepayments, and coupon payments since closing down in April.

In April, Franklin Templeton decided to wind up six of its debt schemes oriented towards high-yield investments, with total assets under management of over ~25,000 crore. It had cited continued redemption pressure and lack of liquidity in the debt market, amid the lockdown, for the closure.

A few days ago, the Economic Offences Wing of Chennai Police had registered a first information report against the asset manager and Franklin Templeton Trustee Services for alleged criminal conspiracy to defraud 300,000 investors by causing wrongful loss to them and unlawful gain to themselves.

“Please do not believe the unsubstantiated rumours and baseless accusations. Since the business has been carried out in compliance with the applicable laws and all decisions taken in the best interests of our unitholders, we are confident about the outcome of any true and fair investigation conducted in this regard,” Templeton said in a note to investors last week.