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Nilanjan Dey

Kolkata , Feb. 11

XAVIER Institute of Management (XIM) has filed an application in a Bhubaneswar court for withdrawal of its suit alleging wrongful non-redemption of units against Franklin Templeton Mutual Fund.

The B-School, whose suit was recently transferred to a fast track court in Bhubaneswar, had claimed an aggregate of Rs 5.60 lakh, inclusive of interest and damages. The matter has now been settled by the asset management company, which has filed an FIR against the one of its former executives.

The employee in question - an executive of the then Kothari Pioneer MF, the country's first private-sector fund house that was taken over by Franklin Templeton MF - was allegedly involved in wrongful redemption made to third parties.

XIM, one of the victims of the move, is learnt to have accepted the amount in final settlement of its claim. Franklin Templeton Mutual Fund too is bringing in an addendum in its offer documents to reflect the latest development.

The action by the former Kothari Pioneer MF staffer had become a major talking point in mutual fund circles and is still referred to as a major instance of fraud. The perpetrator had allegedly transferred money from the investors' accounts to other accounts. Redemption requests were reportedly forged.

The fraud was first noticed when the proprietor of the Balasore-based Sri Jagannath Rice Mill protested against the illegal withdrawal of funds from his investment accounts, it is learnt. The victims of the fraud had reportedly included Loyola Education Society, Loyola Communication Centre and Orissa Jesuit Society.

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