FT should be probed by Sebi and not ED or cops, says Amfi
The ECIR is reportedly based on an FIR filed by the Chennai police under Section 420 of the IPC on the basis of a complaint by the Chennai Financial Markets and Accountability (CFMA), an organisation that fights for investors’ rights.
Enforcement Directorate (ED) has registered an Enforcement Case Information Report (ECIR) against Franklin Templeton Asset Management, said media reports. The ECIR is reportedly based on an FIR filed by the Chennai police under Section 420 of the IPC on the basis of a complaint by the Chennai Financial Markets and Accountability (CFMA), an organisation that fights for investors’ rights.
However, a letter written by the Association of Mutual Funds in India (Amfi) last October had questioned the FIR registered by the police and said that the investigation of such offences must rest with the Securities and Exchange Board of India (Sebi). Now, the ECIR by the ED may force Amfi to change its stand.
Considering that Franklin Templeton India president Sanjay Sapre is also the chairman for Amfi’s operations and compliance committee, it may further complicate the position of the industry body. To be sure, Sapre is also a member of the Mutual Funds Advisory Committee (MFAC) of Sebi.
“Any bona fide decisions and actions of mutual funds, which may go awry due to extraneous reasons, can now be translated into criminal action by non-expert bodies, even when an expert regulator has been established,” the Amfi letter had said.
In response to a Mint query, Amfi reiterated its position. “We firmly believe that the matter is entirely within Sebi’s purview. Sebi has adequate powers to take appropriate action against anyone found to be in contravention of the Sebi Act or the rules and regulations,” said N.S. Venkatesh, chief executive, Amfi.
According to media reports, Sebi has summoned Franklin officials to probe. “The IPC, anti-money laundering laws and Sebi Act govern different offences. To the extent that the concerned action is a securities offence, it is Sebi that should investigate,” said Sandeep Parekh, managing partner, Finsec Law Advisors.
Stay informed on Business News along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs