Could Franklin and Templeton managed the situation better and should the AMC be held accountable?

Templeton had choices but they were not feasible due to the quality of the assets in the six funds. If it was just a few bad investments, that could have been side-pocketed as is now permitted by SEBI. The second option was to just convert these funds into closed ended funds and wait till maturity. Clearly, this would have only been feasible if the fund was confident of the quality of the portfolio. But low grade bonds held by these six funds account for 40% to 60% of the corpus. Obviously, this can be dismissed as systemic risk. The best of star fund managers have no business to play ducks and drakes with public money. Secondly, time and again, trustees have not asked the uncomfortable questions. These are clear governance failures that have been ignored by the trustees. Above all, there must be monetary liability on the AMC. In the case of Essel bonds, HDFC AMC made the provision to compensate the unit holders. There is no reason why Templeton cannot do the same. It is time. it is time for SEBI to make the AMCs pay up for such gaffes!