Sebi imposes Rs 15 cr fine on Franklin Templeton, 8 others

The Securities and Exchange Board of India (SEBI) has imposed a Rs 15 crore fine on nine entities, including Franklin Templeton Trustee Services, some senior officials and fund managers. Sebi has fined Rs 3 crore on Franklin Templeton Trustee Services Pvt Ltd and Rs 2 crore on Franklin Asset Management (India) Pvt Ltd President Sanjay Sapre and Chief Investment Officer Santosh Kamat.

Other persons fined by Sebi are Kunal Agarwal, Sumit Gupta, Pallab Roy, Sachin Padwal Desai and Umesh Sharma. They were imposed Rs 1.5 crore each. They acted as fund managers for various Franklin Templeton schemes. Former chief compliance officer Saurabh Gangrade was also imposed Rs 50 lakh.

The serious lapses and violations clearly appear to be a fallout of the FT-MF's obsession to run "high-yield strategies" without due regard from the concomitant risk dimensions, the Sebi order said. "For a fund house which has been in this industry in India for over two and a half decades, it is surprising that its systems to monitor and manage critical risks like liquidity, credit and concentration are less than robust. The effectiveness of these systems stand compromised in the process of the Noticee's single minded pursuit of reaping high yield," the SEBI order said.

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