Home >Markets >Stock Markets >Franklin’s Vivek Kudva: from one liquidity crisis to another

MUMBAI : Vivek Kudva burnished his reputation as a manager during the global financial crisis by using a mix of business savvy and street smarts to prevent a sudden spurt in redemptions at Franklin Templeton India from causing lasting damage to the asset manager, several of his colleagues said.

His deft handling of the 2008 crisis, just two years after he took over as India chief executive officer, didn’t go unnoticed by Franklin Templeton’s top bosses. He was soon rewarded with wider responsibilities, the people said on condition of anonymity.

His reputation has, however, taken a hit as Franklin Templeton’s India unit fights another liquidity crisis about a decade later. The markets regulator suspects Kudva, now Franklin Templeton’s Asia-Pacific distribution head, of allegedly indulging in insider trading for withdrawing personal investments over 30 crore from several company debt funds close to their winding up last year. The closure, forced by the illiquidity in the market for short-term debt, led to a series of lawsuits, bringing the actions of the fund house under scrutiny.

“Much like the covid-19 crisis for Franklin Templeton India, it was a particularly difficult time immediately after Lehman Brothers collapsed when there was a sudden spike in redemptions from fixed income schemes, which resulted in an acute liquidity crisis," said one of the people cited above.

“The first thing he (Kudva) did was to take Sebi into confidence about the situation," said one of the people cited above. “Additionally, Kudva made sure that local credit lines from banks kept running even as he negotiated with the parent for a $150 million emergency fund infusion to tide over the liquidity crunch and the situation stabilized over a period of time."

Soon after the 2008 crisis, Kudva was promoted as managing director of India and Central and Eastern Europe and the Middle East for Franklin Templeton and, later, given charge of the whole of Europe, Middle East and Africa.

“The charges against him are serious and unfortunate," said a second person who worked closely with Kudva during his early years at Franklin Templeton. “The truth needs to be investigated, including the role played by parent Franklin Templeton and why the situation was allowed to escalate to this extent."

Kudva didn’t immediately respond to a interview request.

“Our interactions with Sebi (Securities and Exchange Board of India) including the details of personal hearings are confidential," a Franklin Templeton India spokesperson said in a written response.

A well-regarded name in the fund management industry till the insider trading charges surfaced, Kudva is among the few who have made it to top leadership roles from India in the fund management industry. An alumnus of Indian Institute of Technology-Delhi and the Indian Institute of Management-Ahmedabad, he spent close to 18 years at HSBC, where he rose to jointly head its India credit card division. In 2004, he joined National Bank of Oman as general manager, but was hired as India CEO by Franklin Templeton two years later to replicate the success of HSBC’s credit card business in mutual funds.

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