FTMF fraud: Not just a case of Breach of Trust
As a Unit Holder in the Franklin Templeton Mutual Fund scheme (FTMF) which they closed down abruptly in April this year, I have been following the matter closely and going through media reports regarding the same. Now, the forensic audit report has come but not made public but which has been reported by the media in detail. After going through these media reports, I have come to the conclusion that the FTMF has indulged in various improper acts like:
Since SEBI and FTMF have decided to not make the forensic report public until all issues are explained by the Mutual Fund and accepted by the auditor and SEBI, this might as well be just a glimpse of the mammoth Franklin Templeton fraud that has so far galloped around Rs 28,000 crore of over 3 lakh Unit Holders like me.
My question is, why is this entire process being handled in a very protracted manner despite the urgency and nature of the scam or the irreversible decisions being made by the public, judiciary and unit holders??
There has been a widespread furore and criticism in the media and the public at large about the way FTMF has been conducting itself post April, but its President, Mr Sanjay Sapre calls it baseless allegations and rumours! This is shocking to say the least!
In fact, Mr Sapre needs to immediately address the concerns of us Unit Holders by answering at least the following questions:
I strongly feel that yet another forensic audit is needed to consider following potential risks, considering the fact that winding up has conclusively damaged the interest of Unit Holders without their consent:
As I understand, the Trustees have a right to change the AMC with the permission of the Unit Holders. However, if the Trustees are not checking the recommendations independently then the Trustees will never know whether the AMC is working in the best interest of the Unit Holders or not.
It is strange that the six schemes were wound up together and in no scheme did the Trustees get any early warning signals to correct the other schemes in time. Lack of independence of the Trustees could have been the only reason of their failure which is also seen from the limited infrastructure, expenses and human resource available with the AMC.
I feel it is high time, the courts ordered investigation into the investment, divestment, compliance, trade timing, governance, etc. which alone can reveal how the Trustees as well as the AMC violated the best practices. Only that will pave the path for speedy recovery of our hard-earned money.
Satyamev Jayate!