Product details

Franklin Templeton India (FTI), the Indian arm of leading asset management company, Franklin Templeton, took a drastic decision on April 23, 2020, at the height of the COVID pandemic that affected millions of Indian investors. On that day, it announced the closure of its six of its debt mutual funds citing abnormally high redemption pressure and a highly illiquid bond market scenario. The sudden, unprecedented, and unilateral decision proved to be a nightmare for the investors and distributors of these schemes in the short-term and had legal and ethical ramifications in the long-term for both the company and the mutual fund industry participants. Was the sudden closure of the funds dictated by unfavorable macroeconomic conditions, or did the company deliberately expose its investors to unnecessary risks by investing in high-risk assets to chase short-term gains? Did the company's management discharge its fiduciary duty to its investors or did it put self-interest ahead of investor interest? Thanks to a Supreme Court ruling, the company had started to return investor money. However, many were still skeptical and suspicious about the company's intent.