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© Reuters. FILE PHOTO: The logo of the Securities and Exchange Board of India (SEBI) is seen on the facade of its headquarters building in Mumbai, India March 1, 2017. REUTERS/Shailesh Andrade/File Photo By Abhirup Roy

MUMBAI (Reuters) – Money manager Franklin Templeton told India’s top court on Monday it would not launch any new debt funds during an ongoing legal spat with the market regulator over the sudden closure of six credit funds, people familiar with the matter told Reuters.

The Securities and Exchange Board of India (SEBI) last month barred Franklin – which manages more than $8 billion for over 2 million people in India – from launching any new debt schemes for two years after a probe into the closures found “serious lapses and violations” at the fund house.

Though an appeals tribunal gave relief to Franklin by putting that directive on hold, SEBI objected to this during a Supreme Court challenge on Monday, prompting Franklin to agree to not launch any new plans while the case is pending, three people familiar with the proceedings said.

The tribunal will next hear Franklin’s case on Aug. 30.

Franklin and SEBI did not respond to requests for comment.

In its 360-page Supreme Court filing, reviewed by Reuters but not made public, SEBI argued that the appeals tribunal had erred in granting relief to Franklin as it had “failed to exercise due diligence and care” while making investments.

Franklin has denied any wrongdoing.

The Supreme Court, however, did not agree to SEBI’s request to force Franklin to return 5.12 billion rupees ($69 million) of fees and interest to investors, staying with the appeals tribunal’s decision that has reduced that amount to half.

Franklin executive Vivek Kudva, head of Asia Pacific distribution, also told the top court on Monday he would not trade in securities until his appeals against SEBI’s one-year market ban is decided, sources said.

SEBI last month barred Kudva saying he and his family members used non-public information to sell holdings worth about $4 million in funds that were shut down. Kudva denies wrongdoing and has argued SEBI had overstepped its powers.