Home Business Business CFMA says mulling class-action suit against Franklin Templeton

Business CFMA says mulling class-action suit against Franklin Templeton

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CFMA says mulling class-action suit against Franklin Templeton&nbsp | &nbspPhoto Credit:&nbspBCCL

New Delhi: Amid an outcry over losses suffered due to closure of certain schemes by Franklin Templeton Mutual Fund, investors group CFMA has said it is contemplating filing a class-action suit against the global fund house for recovery of money and to claim damages. The CFMA (Chennai Financial Markets & Accountability) has requested all aggrieved investors to come together for filing the class-action suit, it said in a statement.

The CFMA also asked all investors to file their complaints to the Economic Offence Wing of Chennai Police, so that all the pleas can be collectively pursued in the Madras High Court, where the investors’ body has already been fighting this case. It further said in the statement that the EOW has registered a first information report (FIR) against the beleaguered Franklin Templeton Asset Management India Pvt Ltd and Franklin Templeton Trustee Services Pvt Ltd (FTTSPL) and their top management personnel.

It has accused the fund house and its top management of conspiracy to defraud 3 lakh investors by causing wrongful loss to them and unlawful gain to themselves. While denying the allegations, the fund house has maintained that there has been “no illegality, wrongdoing or misrepresentation” and that it had followed due process in making investment decisions as well as in the winding up of the schemes.

Earlier this year, Franklin Templeton had closed six debt funds, citing redemption pressures and lack of liquidity in the bond markets. Capital market regulator Sebi had subsequently asked the fund house on multiple occasions to focus on repaying the investors at the earliest. These schemes had an estimated Rs 28,000 crore of investors’ money.

The CFMA said the FIR has been registered following a complaint filed by the investors’ body and few others with the EOW, Chennai, in May.
After the six schemes were closed, several investors have filed complaints against the fund house, including with the regulatory authorities and with the police, while a few have gone to courts also.

The CFMA said millions of retired and pensioner investors had parked their hard-earned savings in various schemes of Franklin Templeton, expecting a safe and better return on their investments as promised by the global fund house that manages over Rs 1.16 lakh crore in mutual funds in India and USD 700 billion globally.

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