Under scanner for front running? Axis Mutual Fund suspends two fund managers

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. According to sources, both the fund managers have been suspended on allegations of front running.

"Axis AMC has been conducting a suo moto 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 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.

Front running is when a broker has exclusive details of a stock being bought or sold in large quantities and trades that stock to benefit from it. The practice is illegal in India.

According to mutual fund advisors, investors should not do anything at the moment and wait for the details.

"At the moment mutual fund investors should not make any changes to the schemes. All the funds that have seen the change are managed by multiple managers and hence I don't see a reason to panic right now. Investors should not make any changes to their portfolio till the rumours are confirmed and there is a statement from the fund house. Even after that, if at all it changes anything for your particular scheme has to be seen," says Vishal Dhawan, Founder Plan Ahead Investment Managers.