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Sacked Fund Managers of Axis Mutual Fund may be prevented from trading


Sacked Fund Managers of Axis Mutual Fund may be prevented from trading

axis mutual funds

The Securities and Exchange Board of India (Sebi) may issue interim orders banning the two former fund managers of Axis Mutual Fund (MF) from the market for alleged trade front-running.

The statement states, “The market regulator has accumulated prima facie evidence that the duo has violated the market’s integrity.”

According to a source, the Sebi could take measures under Section 11 (4) to protect investors and the securities market while the case is still under investigation.

Interim orders are issued by the Sebi when it deems that action is required to safeguard market integrity.

In recent weeks, the Sebi has conducted extensive search and seizure operations in a number of places in order to gather evidence on alleged front-running.

The regulator has seized papers, documents, and digital evidence from the phones, laptops, and hard drives of 16 suspicious organizations.

Information on probable front-running trades at Axis MF has also come from the regulator’s internal surveillance alert systems and the National Stock Exchange (NSE).

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Emails made to Sebi and Axis MF were not returned.

Axis MF asked fund managers Viresh Joshi and Deepak Agarwal to quit the company last month due to alleged irregularities.

Through an interim order, the regulator aims to prohibit the pair from purchasing, selling, or dealing in securities, either directly or indirectly. According to a source, the regulator is looking into whether the two groups, as well as others linked with them, made illicit gains.

This will allow it to seize the bank accounts of these entities up to the amount of claimed ill-gotten gains.

Before firing Agarwal and Joshi, Axis MF had suspended them pending an investigation.

The fund house delegated responsibility for seven schemes to various fund managers.

The fund company has also engaged the help of two agencies to investigate the front-running situation.

The agencies were tasked with identifying gaps and establishing if extra people were involved in any way.

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