Notwithstanding the reports, Franklin Templeton's President Sanjay Sapre has said that the mutual fund investment company has no plans to exit its India business. This comes following the media scrutiny suggesting that Franklin Templeton had requested discussions with the Indian Ambassador to the US, over the SEBI (Securities and Exchange Board of India) probe into six of its shut debt schemes. There were ongoing speculations that the renowned mutual fund investment company had indirectly threatened the Indian government stating that, if the market regulator dares to levy ‘unfairly large penalties’ – either by fine or disgorgement, Franklin Templeton may pull out of India. Addressing the above in his letter dated 2nd April 2021, Sanjay Sapre said, “We were early entrants in the Indian mutual fund industry and have remained a part of the industry even while many other global asset managers decided to leave.” He further reassured his investors stating that there are no plans to exit the India business. Therefore, any speculation suggesting otherwise, or any rumours around sale of the business in India are incorrect. The letter, however, did not repudiate reports of talks with Indian authorities. On April 23, 2020, an unforeseeable announcement was made. Franklin Templeton mutual fund investment company declared the winding up of six of its debt mutual fund schemes in India with total assets between Rs 25,000 and Rs 30,000 crore (roughly $3.75–4.25 billion) affecting more than 3 lakh investors. The pandemic and the resultant illiquidity in debt markets—particularly in lower-rated debt held by these schemes—were cited as the reasons for this winding-up decision by Franklin Templeton. There were a series of court litigations. Franklin Templeton was being accused of alleged mismanagement which the company denied but distressed investors approached the courts. As an immediate relief, the Supreme Court of India, on the 2nd and 9th February 2021 ordered the distribution of cash surpluses of R. 9,122 crore. The top Court named SBI Funds Management to oversee the winding up and facilitate the return of money to the investors. The Supreme Court of India in its 18th March 2021 decision, approved the standard operating procedure (SOP) recommended by SBI Mutual Fund for distribution of the assets of the six wound-up debt schemes of Franklin Templeton amongst its unit-holders. The plan was prepared in consultation with Franklin Templeton and the market regulatory body Securities and Exchange Board of India (SEBI).
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