SEBI censured by the Karnataka HC in Franklin Templeton case; correct measures not taken by SEBI.

SEBI censured by the Karnataka HC in Franklin Templeton case; correct measures not taken by SEBI.

In the Franklin Templeton case hearing, the Karnataka High court’s division bench led by Hon’ble Chief Justice Abhay S Oka and Hon’ble Justice Ashok S Kinagi brought to attention of SEBI its failure, with regards to certain duties that SEBI ought to perform but did not. Remarking on the same, the HC reminded SEBI of its very primary objective that is protecting the investors’ interests.

As per the facts, SEBI was not in possession of copy of resolution, it failed to reply to the letters seeking its permission for winding up the schemes. The Karnataka High Court restricted Franklin Templeton and ruled that the latter cannot, without obtaining investors’ consent wind up the debt fund schemes and while all this, SEBI could have been more vigilant and proactive.  

The bench observed that:

As stated in the statement of objects and reason, the confidence of investors in capital market can be sustained by ensuring that the interest of the investors is protected. The very Scheme of the SEBI Act suggests that SEBI has to act as a watchdog to protect the interests of the investors.

Further that SEBI should have been prompt when it was the first case of winding up under regulation 39(2) a.  The Karnataka High Court issued directions to the SEBI again, to take action in accordance with Regulation 65.

Anusha Richa Mishra
"Let justice be done, though the heavens fall" I am Anusha Richa Mishra and I believe that justice is for everyone and the correct approach towards it is to spread awareness, to awaken, uplift and enable each and every individual so that they get what look wish for. I am a Graduate in Economics and am currently pursuing my degree of LLB from BVDU’s New Law College, Pune. I aspire to contribute to the society through my efforts and approach towards a just environment where we co-exist, follow the law and worship the Constitution.