CFMA Says It Is Considering Class Action Lawsuit Against Franklin Templeton | Photo credit: BCCL
New Delhi: Amid a protest over losses suffered due to the closure of certain schemes by the Franklin Templeton Mutual Fund, investor group CFMA has said it is contemplating filing a class action lawsuit against the global fund house to recover money and claim damages. The CFMA (Chennai Financial Markets & Accountability) has asked all aggrieved investors to come together to file the class action lawsuit, it said in a statement.
The CFMA also asked all investors to submit their complaints to the economic crimes wing of the Chennai police, so that all allegations can be collectively prosecuted in the Madras High Court, where the investor body has already been fighting in this case. Furthermore, it 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 senior management staff.
He has accused the fund house and its top management of conspiring to defraud investors of 3 lakh by causing them an unfair loss and an illegal profit for themselves. Although it denies the accusations, the fund house has maintained that there has been “no illegality, irregularity or misrepresentation” and that it has followed due process in making investment decisions, as well as in the liquidation of the schemes.
Earlier this year, Franklin Templeton had closed six debt funds, citing bailout pressures and a lack of liquidity in the bond markets. Subsequently, capital market regulator Sebi had asked the fund house multiple times to focus on repaying investors as soon as possible. These schemes had an estimated Rs 28,000 crore of money from investors.
The CFMA said the FIR has been registered following a complaint filed by the investor body and some others with the EOW, Chennai, in May.
After the six schemes were closed, several investors have filed complaints against the fund house, including with regulatory authorities and the police, while some have also gone to court.
The CFMA said millions of retired and retired investors had deposited their hard-earned savings into various Franklin Templeton schemes, expecting a better and safe return on their investments as promised by the global fund house managing more than Rs 1.16 lakh. crore in mutual funds in India and USD 700 billion globally.
