PremiumAxis mutual fund has sacked two fund managers - Viresh Joshi and Deepak Agarwal on the charges of misconduct without going into details. Joshi has sent a legal notice to the fund house on wrongful termination
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The Securities and Exchange Board of India (Sebi) carried out search and seizure operations on 16 suspected entities at more than 30 locations in Maharashtra and Gujarat over the past few weeks as part of its ongoing probe into the so-called front-running case at Axis Mutual Fund, said a senior official at the capital market regulator.
Mint first reported on 18 May that select fund managers at Axis Mutual Fund used to share trade information with outside brokers which was further used by seven entities in Gujarat who traded on these tips in large numbers. Some of these entities were shell companies.
Axis Mutual Fund has sacked two fund managers, Viresh Joshi and Deepak Agarwal, on alleged charges of misconduct, without disclosing details. Joshi has sent a legal notice to the fund house alleging wrongful termination.
Over the past few months, Sebi has been receiving alerts from its internal surveillance alert system and inputs from the National Stock Exchange about suspected front-running of trades of Axis Mutual Fund. The modus operandi of the fund managers was pieced together using Sebi’s own alerts, NSE data and a preliminary report submitted by the fund house.
Front running is the act of trading in securities ahead of the fund house. As mutual funds make large transactions, their actions tend to impact the stock price, and a person can profit or avoid losses with prior knowledge of such deals.
“Based on the said alerts and the surveillance inputs, Sebi initiated investigation into the suspected front running of trades of Axis MF by certain entities," the official cited above said seeking anonymity.
“During search and seizure, officials searched the official and residential premises of 16 entities covering officials of Axis MF, stock brokers, authorized persons of stock brokers and traders. Sebi has seized various records, documents and digital evidence from mobile phones, laptops, desktops, tablets, hard drive disks, etc. found in the custody of these entities," the official added.
Joshi was head, equity dealer, and fund manager for six funds at Axis Mutual Fund. Deepak Agarwal was the equity research analyst and fund manager for three mutual fund schemes.
