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SAT allows Franklin Trustee, staffers to deposit 50% of penal amount

  • July 29, 2021

The Securities Appellate Tribunal (SAT) on Thursday provided interim relief to top officials of Franklin Templeton Mutual fund (MF) and its trustee by staying an order passed by market regulator Securities and Exchange Board of India (Sebi) against the fund house.

The tribunal has asked the officials and trustee of the fund house to deposit 50 per cent of the penalty imposed by Sebi within three weeks in an escrow account. The balance it said shall not be recovered until the pendency of the appeal.

The appellate will now take up this issue along with the appeal of Franklin MF for the final hearing on August 30.

In June, Sebi had imposed Rs 3 crore penalty on FT Trustee Services and Rs 2 crore each on chief executive officer (CEO) Sanjay Sapre and chief investment officer (CIO) Santosh Kamath due to lapses while managing the six schemes wound up last year.

Five other fund managers were levied a fine of Rs 1.5 crore each and chief compliance officer was asked to pay Rs 50 lakh. FT MF had shuttered its six debt schemes in April 2020 citing liquidity issues due to the Covid-19 outbreak.

Earlier in a related matter, SAT had given Franklin Templeton MF relief by staying the order that barred it from launching new debt schemes for two years. However, recently the Supreme Court overturned this relief given by the tribunal.

Sebi later moved the Supreme Court against certain directions passed by SAT. Franklin Templeton MF told the apex court that it won’t launch any new schemes until the tribunal heard its appeal.

Article source: https://www.business-standard.com/article/markets/sat-allows-franklin-trustee-staffers-to-deposit-50-of-penal-amount-121072901212_1.html

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