Axis Mutual Fund Changes Fund Manager in 7 Schemes Amid Violations

In the latest buzz in the Indian mutual fund industry, Axis Mutual Fund the seventh-largest mutual fund in the country, managing assets (i.e. AUM) of over Rs 2.50 lakh crore has sent two of its fund managers on leave amid allegations of front running.

Namely, Viresh Joshi, Chief Trader & Fund Manager - Equity at Axis Mutual Fund and Deepak Agrawal, Asst. Fund Manager - Equity at Axis Mutual Fund have been immediately removed from the fund management role after alleged violations of front running in the schemes they were managing.

According to the sources, the matter is now with the mutual fund regulator SEBI and the probe has been initiated.

Notably, Viresh Joshi was the fund manager in Axis Banking ETF, Axis Consumption ETF, Axis Nifty ETF, Axis Technology ETF, and Axis Arbitrage Fund; whereas Deepak Agarwal managed Axis Value Fund, Axis Quant Fund, and Axis Consumption ETF.

Both the alleged fund managers will no longer be a part of any of the Axis Mutual Fund schemes and could be even barred from the markets, depending on the result of the probe.

Note: None of the above mutual fund schemes has been recommended by PersonalFN under any of its services.

Investors need not react immediately to the news as the fund house has already sacked both the fund managers from their responsibilities.

The extent of notional losses that may have occurred to the investors in these schemes can only be estimated after the probe. Investors may have to wait for further action, disclosures, and announcements from the fund house and the regulator around this matter.

In its tweet, Axis Mutual Fund has issued a statement that “Axis AMC has been conducting a suo motu investigation over the last two months (since February 2022). 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 for any instance of non-compliance.

The media is requested to not give credence to market speculation and idle gossip, which are baseless and we strongly refute the same”

What is Front Running?

Front running is an illegal act or a practice where the market participants deal ahead based on the advance information of a large trade volume of stock being bought or sold. Such deals are carried ahead of the bulk buy/sell transaction to benefit from the price movement due to the bulk buy/sell transaction, even before the clients could benefit from it.