Franklin Templeton India has issued an apology to SEBI for any misunderstanding regarding the recent closure of its India schemes and said that is committed to refund the investors. Franklin’s global Chief Executive Officer Jennifer Johnson was earlier quoted as saying at a post-earnings conference call that the country’s new rules on investment in unlisted debt had orphaned a third of their funds as these bonds could no longer be traded. The Securities and Exchange Board of India (SEBI) had rebutted claims that tighter rules pushed Franklin Templeton into freezing six debt funds last month, and said the asset manager should focus on returning the $4.1 billion to investors.
The new regulations were enforced after the collapse of a major infrastructure financier in September 2018, SEBI said in a statement Thursday. The rules were created by a committee that included representation from Franklin, according to the statement.
Franklin Templeton said in a media statement that Ms Johnson, while responding to a question regarding the closure of the schemes, had provided a general background of the fund house’s experience in the Indian market before the onset of Covid-19.
The fund house said that the President and CEO was quoted out of context and this had diluted the essence of her responses. “This is neither factually correct nor substantiated by the comments made during the conference,” Franklin Templeton said in the media release.
Franklin Templeton went on to clarify that the primary reason for the winding up of the schemes was the severe market dislocation caused by the Covid-19 pandemic and related lockdown. his had led to severe market illiquidity, especially for papers rated below AAA, and increased redemptions during the period, the fund house added.