Mumbai: A day after SEBI ordered a one-year ban on Vivek Kudva, the Head of Asia Pacific Distribution for Franklin Templeton, and his wife Roopa Kudva, from trading in the securities market, over insider trading, the key official of the fund house has said that he is considering approaching the Securities Appellate Tribunal (SAT) against the order.
In a statement, Kudva said that his personal transactions in the two shut schemes were conducted in good faith and with no intent to gain unfair benefit.
"I have the highest regard for SEBI. However, I am reviewing the order and considering appropriate next steps which may include filing an appeal before the Securities Appellate Tribunal (SAT)," he said.
Stressing that he has always acted in accordance with SEBI norms, the Franklin Templeton Director said: "As stated in the SEBI order, I had already placed myself in a similar position as investors in April 2020 and the proceeds of the redemptions were voluntarily set aside such that I and my family will ultimately receive no more than the investors remaining in the schemes."
He said that his interests therefore remain fully aligned with outcomes that investors in the two schemes under winding up will have.
The Franklin Templeton spokesperson said that as Kudva has issued a statement the company has nothing further to add at this time.
"At Franklin Templeton, we place great emphasis on compliance, and have policies in place to cover a variety of matters including personal transactions of employees and managing conflicts of interest, consistent with applicable regulations and global best practices," as per the company.
The company spokesperson added that the schemes under winding up continue to have significant investments from employees and management, as well as from the asset management company and other group companies of Franklin Templeton.
The SEBI order on Monday restrained both the notices from "accessing the securities market and further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, whatsoever, for a period of one year from the date of this order."
The inspection found that during April 1, 2019, to April 23, 2020, Vivek Kudva (Director of FT-AMC), his wife Roopa Kudva and mother Vasanthi Kudva had redeemed units in the Impugned Debt Schemes during the period.
Vivek Kudva, allegedly, in his capacity as a Director of FT-AMC, was privy to information such as concerns of redemption, concentration and liquidity risk pertaining to the stress in the Impugned Debt Schemes, most of which was not in public domain.
The order said that the noticees had cumulatively redeemed units amounting to over Rs 30.70 crore while in possession of material non-public information.
Vivek had redeemed units worth over Rs 11.62 crore on his own behalf and units amounting to over Rs 85.15 lakh on behalf of his mother. Further, his wife Roopa redeemed units on her own account amounting to over Rs 18.22 crore, found the SEBI probe.
The regulator directed that both Vivek and Roopa should jointly and severally transfer the redeemed amount within a period of 45 days, from the date of receipt of this order. In case of failure to do so, simple interest at the rate of 12 per cent per annum shall be applicable from the expiry of the said 45 days till the date of actual transfer.
Further, the FT official would be liable to pay a monetary penalty of Rs 4 crore for the redemptions undertaken on his own behalf and on behalf of his mother, and his Roopa would have to a fine of Rs 3 crore for the redemptions from her account.
Franklin Templeton India on April 23, 2020, informed the unit holders of certain schemes of FT-MF that it was winding up the schemes in conformity with the provisions of SEBI regulations.
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