Axis Mf Issues Statement On Reports Of Search Operations At Offices In Front Running Case

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Axis Mutual Fund (MF) said it continues to work and corporate with regulatory authorities after reports suggested that certain actions have been conducted by the regulatory authorities concerning the AMC, and related issues.

“Axis AMC has been conducting a suo moto investigation since February 2022 with assistance from reputed external advisors. While the review process is still continuing, additional actions have been taken as part of the ongoing investigation, and various enhancements are being implemented based on findings, till date,” the fund house said in a statement.

The statement comes after reports suggested that SEBI is carrying out search and seizure operations at various offices of Axis MF as part of the ongoing probe into suspected wrongdoings by two former fund managers of the asset management company (AMC).

“Stringent action (in terms of termination of employment) has been taken in respect of two fund managers of equity mutual fund schemes where the AMC has reason to believe that there may have been a violation of securities laws,” the statement added.

Earlier this month, Viresh Joshi, who was head equity dealer and a fund manager for six mutual fund schemes, was terminated by Axis Mutual Fund on 18 May. The disclosure by the fund house did not go into the details of the charges that led to his termination. A second fund manager, Deepak Agarwal, was also terminated on 20 May.

Market regulator SEBI has been investigating a case of serious violations in the running of Axis MF. The suspected violation is a practice called front-running, which can involve a fund manager buying or selling securities through their personal accounts ahead of the fund itself making those transactions. Because funds deal in large volumes, their actions tend to have an impact on the price and a front runner can make gains or avoid losses.

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