ED launches money-laundering investigation against Franklin Templeton
PrintListen to this Article
Multiple sources connected to the case confirmed the action by ED, which investigates financial crimes, to Moneycontrol.
The ED has registered an Enforcement Case Information Report (ECIR) against Franklin Templeton based on a First Information Report (FIR) filed at the Chennai Police Economic Offences Wing. The FIR against Franklin Templeton was registered on September 29, 2020, in Chennai under Section 420.
The mutual fund and its CIO have been charged with cheating and hatching a criminal conspiracy to defraud innocent investors, causing a wrongful loss to investors, and making unlawful gains themselves.
Moneycontrol reached out to Franklin Templeton for responses on the latest events but the AMC is yet to respond.
A forensic audit report by Choksi and Choksi stated that there were 23 instances of top executives and entities withdrawing Rs 53 crore between March and April 2020, just before the winding up of the six debt schemes.
One of the persons familiar with the matter said the forensic audit report showed that FT officials sold their investments just before the six debt mutual fund schemes were closed and the investigation will check if the gains from this sale can be treated as ‘proceeds of crime’ under the Prevention of Money Laundering Act (PMLA). “The ED may also look into why the FT officials didn’t use put options when the investment was in a loss. In addition, the directorate will investigate if FT officials got any monetary benefit by not executing the put options.”
All the persons Moneycontrol spoke to did not want to be named.
A put option is a contract that gives the holder the right to sell a certain number of securities at a predetermined price, called the strike price, before the option’s expiry.
Moneycontrol was the first to report on the findings of the forensic audit report, on October 6 last year.
The ED action is the latest setback for Franklin Templeton as legal troubles mount. It faces cases in the Karnataka High Court and the Supreme Court.
The Securities and Exchange Board of India has issued show cause notices to key management personnel of the fund and its trustees in this case. The capital markets regulator issued notices after the final report submitted by audit firm Choksi and Choksi, which indicated that the fund doled out favours to certain companies it had invested in by not exercising the put option, despite its risk management committee advising the Chief Investment Officer to do so.
The audit report states that the fund managers were inconsistent in exercising the put option. They executed it with some companies but not with others, despite a major downgrade from category A to category D grade in less than a year’s time.
Franklin Templeton officials have so far denied any wrongdoing.
Category : General | Comments : 0 | Hits : 719
Retirement fund body EPFO has said it will no longer use Aadhaar as a valid document for proof of date of birth. In an official circular on January 16, the Employees' Provident Fund Organisation (EPFO) said the decision to remove Aadhaar was taken following a directive from the Unique Identification Authority of India (UIDAI). As per the circular, Aadhaar is also being removed from the list of documents for correction in date of birth.
A five-day-long Special Parliament Session will be held from Monday. A Parliamentary Bulletin said, that on the first day a discussion on the Parliamentary Journey of 75 years starting from Samvidhan Sabha - Achievements, Experiences, Memories, and Learnings will be held in Lok Sabha. The Government has listed Bill on the appointment of the Chief Election Commissioner, and other election commissioners in the upcoming Parliament Session. Apart from this The Advocates (Amendment) Bill, Th...
Artificial intelligence can substitute neither the human intelligence nor the humane element in the adjudicatory process, the Delhi high court has held and said ChatGPT can't be the basis of adjudication of legal or factual issues in a court of law. Justice Prathiba M Singh stated that the accuracy and reliability of AI generated data is still in the grey area and at best, such a tool can be utilised for a preliminary understanding or for preliminary research. The court's observati...
Domain + Website + Hosting + 2 email ids @ Just Rs.3100/- with 30 days Money Back Guarantee. CASANSAAR offers a Golden opportunity for Professionals, where they could create their own stunning website with multiple designs and templates to choose. It will be completely your own space, which is going to be a Dynamic Website and could be edited as per your wish. Now Get 2 Email ID's with Your Own Websi...
The Delhi High Court Monday sought the Centre’s stand in a plea against a notification where chartered accountants, company secretaries and cost accountants have been included among “reporting entities” under the Prevention of Money Laundering Act (PMLA) A division bench of Chief Justice Satish Chandra Sharma and Justice Sanjeev Narula granted time to Additional Solicitor General Chetan Sharma, who appeared for the Centre, to “seek instructions” and listed the ma...
Comments