On Monday (March 29, 2021), Madras High Court heard a plea that was filed pertaining to the alleged embezzlement of funds by the trustees of Franklin Templeton Asset Management India Pvt. Ltd. In the said matter, the Madras HC went on to observe how the Economic Offences Wing in the state police needs to be beefed up with appropriate personnel.
The plea was heard by Chief Justice, Sanjib Banerjee along with Justice Senthilkumar Ramamoorthy. It concerned official’s ability along with their technical expertise while conducting an investigation into the matter.
The Plea
While making submissions, the Petitioner said that he had made an attempt to unearth the flight of the capital around Rs 2, 000 Crores due to the related party transactions along with redemption to the extent of 5000% increase on the amount of insider trading.
He also submitted that the investigating agencies that have the relevant knowledge and domain must investigate the complaints in this matter. Along with this, he alleged the absence of a degree of specialisation in the Economic Offences Wing in the State Police.
He further submitted how the transfers of a Deputy Superintendent of Police or an inspector of Police from one branch to another are being done without even paying required heed to the fact whether the personnel has an aptitude along with an understanding of market conditions and economic affairs. He explained how such requisites are necessary to undertake investigations that pertain to highly sophisticated cases.
Observations of the Court
The court went on to note how in its earlier orders it had directed the Economic Wing to make sure that it was manned by trained personnel who must have the requisite knowledge and experience in accounting, auditing along with market conditions. However, no efforts whatsoever had been made to comply with its directions.
No training or recruitment of trained personnel was undertaken along with no effort to engage experts or consultants in the said regard.
The court opined,
"It is necessary that the investigation into the role of those in control of the six funds be conducted and, at the same time, the Economic Offences Wing in the State police is beefed up, so to say, with appropriate personnel."
It must be noted that Security Exchange Board of India (SEBI) and the Enforcement Directorate (ED) have been added as the parties to these proceedings in order to state how the said marketing regulator along with the investigating agency may be equipped better to be able to deal with the transactions pertaining to the six mutual funds to unearth anything remiss therein.
At the same time, the Chief Secretary and the Home Secretary, Government of Tamil Nadu, were called upon to file a report suggesting measures to introduce a degree of specialization in the Economic Offences Wing of the State police, particularly in the manner of recruitment or even engagement of consultants or the like.
Lastly, the matter is supposed to heard on June 7, 2021 now.
