Axis MF fires 2 key fund managers

Mumbai Axis Mutual Fund, the seventh largest fund house in India with an average asset under management (AAUM) of Rs2.59 trillion has fired one of its key fund managers, Viresh Joshi, for his alleged involvement in placing orders at a value much higher or lower than the prevailing market price at the instance of certain brokers for the unethical trading practice.

Also known as front running, the practice is when a broker has exclusive details of a stock being bought or sold in large quantities and trades that stock to benefit from it. The practice is illegal in India.

Joshi was associated with the fund house since 2009 in the capacity of a chief trader and an equity fund manager.

"Axis AMC has been conducting a suo moto internal investigation since February, using reputed external advisors to assist with this investigation," the fund house said in a statement.

Further to our ongoing investigation, his conduct and following the decision to suspend him, the employment of Viresh Joshi (chief tracker and fund manager) with Axis AMC has been terminated with effect from May 18 and he will no longer have any association whatsoever with Axis AMC and Axis Mutual Fund. Accordingly, Viresh Joshi ceases to be a key person of Axis AMC, it said. We take compliance with applicable legal/regulatory requirements seriously, and have zero tolerance towards any instance of non-compliance, it concluded.

Meanwhile, the capital markets regulator, SEBI has kick started probe against the two fund managers of Axis Mutual Fund.

Earlier, a source familiar with the development, had told Bizz Buzz, "The two funders were allegedly involved in placing orders at a value much higher or lower than the prevailing market price at the instance of certain brokers for the unethical trading practice.

The fund house has suspended two fund managers pending investigation of potential irregularities, as per an official statement on May 06. Both of them have moved out whereas other fund managers have been asked to run the show.

Both the fund managers have been suspended on allegations of front running. The fund house has used reputed external advisors to aid the investigation.

Axis Mutual Fund had removed Viresh Joshi, head trader and fund manager from the fund management team of seven of its equity schemes.

Deepak Agrawal, equity research analyst and fund manager, has also been removed from the management team of three funds. However, the fund house has not divulged anything about the other fund manager in question so far. The seven funds that have seen the management change include Axis Consumption ETF, Axis Banking ETF, Axis Nifty ETF, Axis Arbitrage Fund, Axis Quant Fund, Axis Technology ETF and Axis Value Fund. These funds together have got AUM of Rs 7,778 crore.

Joshi has been replaced by Ashish Naik, while in the banking and consumption ETFs, both Joshi and Agarwal have been replaced by Naik.