Sebi begins probe against 2 suspended fund managers of Axis MF
Meanwhile, fund house’ MD & CEO has written to all investors stating investigation is in progress and hints about availability of liquidity on redemption request
image for illustrative purpose
Mumbai: The capital markets regulator, SEBI has kick-started probe against the two fund managers of Axis Mutual Fund. On the other, the MD and CEO of the fund house Chandresh Nigam has written to all the investors that the investigation was under progress and that the liquidity available so as to meet the redemption request, if any.
A source familiar with the development, 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 seventh largest fund house in the country with an average asset under management (AAUM) of Rs 2.59 trillion 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 has 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.
"Axis AMC has been conducting a suo motu investigation over the last two months (since February). The AMC has used reputed external advisors to aid the investigation. As part of the process, two fund managers have been suspended pending investigation of potential irregularities. We take compliance with applicable legal/regulatory requirements seriously, and have zero tolerance towards any instance of non-compliance," said Axis Mutual Fund.
The seven funds that have seen the management change are: 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Joshi has been replaced by Ashish Naik, while in the banking and consumption ETFs, both both Joshi and Agarwal have been replaced by Naik. In his missive to the investors, Nigam says, "The fund house started proactive investigation in February and is using reputed external advisors to carry out the investigation. While review process is still continuing, we have taken action against two fund managers holding certain equity schemes, pending further investigation, the letter says. As our investigation progresses, based on the findings, we will further take action on what may be necessary, it adds. There are no restrictions on redemptions. In any event, we believe that the liquidity available with our funds and the quality of our portfolio will ensure us to meet redemption request from investors, if any, it said.
