Axis MF suspends two fund managers for unethical trading practice
Axis Asset Management Company has suspended two fund managers as part of its investigation into stock brokers complaints on alleged irregularities in placing of equity trading orders
The Fund managers-cum-traders of the fund house have been placing orders at a value much higher or lower than the prevailing market price and receiving kick-backs from certain brokers for indulging in such unethical trading practice, sources said.
The development has surprised many retail investors even as the market regulator SEBI has been tightening mutual fund regulations to protect investors’ interest.
Axis AMC said it has been conducting a suo moto 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, it said.
Viresh Joshi, chief trader and fund manager and Deepak Agarwal, assistant fund manager are among those who have been removed from managing seven equity schemes.
In an addendum issued on May 4, the fund house has removed the name of these two fund managers from seven schemes, including Axis Arbitrage, Banking ETF, Nifty ETF, Consumption ETF, Quant Fund, Technology ETF and Value Fund which they were co- managing with other fund managers.
These seven funds together have an asset under management of ₹ 7,778 crore with Arbitrage and Quant Fund having the highest asset of ₹ 5,785 crore and ₹ 1,530 crore while Value Fund and Nifty ETF have an AUM of ₹ 240 crore and. 126 crore. Banking and Technology ETFs have attracted investments of ₹ 56 crore and ₹ 29 crore while the consumption ETF have asset of ₹ 12 crore.
In Axis Arbitrage, Joshi has been replaced by Ashish Naik while in the Banking and Consumption ETFs both Joshi and Agarwal have been replaced with Naik. Axis Quant Fund managed by Agarwal all alone, has been taken over by Naik and Hitesh Das. Technology ETF and Value Fund will now be managed by Jignesh Gopani and Hitesh Das.
The market regulator SEBI is also looking into the functioning of the fund house and complaints on recent lavish lifestyle of the employees.
May 06, 2022