SEBI headquarters (Representative image)
The Securities and Exchange Board of India (SEBI) has restrained the head of Franklin Templeton Asia Pacific (APAC), Vivek Kudva, and his wife Roopa Kudva, MD of Omidyar Network India, from accessing securities market for one year.
The regulatory body has directed them to transfer Rs 30.70 crore of redeemed FT units to escrow account within 45 days.
The SEBI has also barred Franklin Templeton Asset Management Company (FT-AMC) from launching any new debt scheme for two years, and has imposed a of Rs 5 crore for violation of regulations in the shutting down of six debt schemes last year.
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Vivek Kudva has also been asked to pay a monetary penalty of Rs 4 crore, whereas, a fine of Rs 3 crore has been slapped on Roopa Kudva.
"As a result of the irregularities in the running of the debt schemes inspected, loss has been caused to the investors. The noticee was under a statutory obligation to abide by the provisions of the Mutual Regulations and circulars issued thereunder, which it failed to do," the order issued by SEBI's Whole Time Member G. Mahalingam stated.
"Each of the provisions contained in Sections 15A(b), 15D(b), 15D(f), 15E and 15HB of the SEBI Act mandate a maximum penalty of Rs 1 crore. Accordingly, I am of the view that a monetary penalty of Rs 5 (five) crore be imposed under Section 15I of the SEBI Act read with Rule 5 of the SEBI Inquiry Rules, on the Noticee for the violations," it further added.
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The monetary penalty imposed by SEBI is required to be paid within 45 days by Franklin Templeton.
In response to the SEBI's order, Vivek Kudva said: “My personal transactions in the two schemes (under winding-up) have been conducted in good faith and with no intent to gain unfair benefit. As stated in the SEBI order, I had already placed myself in a similar position as investors in April 2020 and the proceeds of the redemptions were voluntarily set aside such that I and my family will ultimately receive no more than the investors remaining in the schemes. My interests therefore remain fully aligned with outcomes that investors in the two schemes under winding up will have.”
Kudva added that he is reviewing the order and "considering appropriate next steps which may include filing an appeal before the Hon’ble Securities Appellate Tribunal (SAT)."
Additionally, the regulator has also initiated adjudication proceedings against certain top employees of FT–AMC. "In my view, the employees of FT-AMC may be liable for the aforementioned irregularities arising during the course of business of the noticee. From the records made available before me, I note that SEBI has initiated adjudication proceedings against certain employees of FT-AMC including the Chief Executive Officer, Chief Compliance Officer and the Directors," the order said.