Former fund manager Viresh Joshi sends legal notice to Axis Mutual Fund amid probe

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Viresh Joshi, former fund manager of Axis Mutual Fund who is currently under investigation for alleged front running, has sent a legal notice to the fund house saying he was wrongly terminated, Mint reported.

Joshi has sent two notices so far: The first one on May 6 after suspension andthe second on May 20 following termination. He alleged in the notice that due process had not been followed.

Also Read: Axis AMC terminates chief trader Viresh Joshi, probe underway

Joshi, who was head equity dealer and a fund manager for six mutual fund schemes, was terminated by Axis Mutual Fund on May 18. The disclosure by the fund house did not go into the details of the charges that led to the termination.

A second fund manager, Deepak Agarwal, was also terminated on May 20 and a similar statement was issued by the fund house, according to Mint.

Joshi’s termination is largely on account of charges of alleged front running and sharing confidential information about the asset manager’s trades with brokers in Gujarat in return for kickbacks.

Axis Mutual Fund has neither confirmed nor denied these so far. The matter is being investigated by market regulator Securities and Exchange Board of India (Sebi) and is separate from the probe being done by the fund house.

Also Read: Axis Mutual Fund sacks 2nd fund manager under investigation for irregularities

In addition to charges of front running, Joshi is facing allegations of disproportionate assets.

Joshi, who has spent over a decade at the fund house, was also in the role of fund manager in five schemes – Axis Arbitrage Fund, Axis Banking ETF, Axis Nifty ETF, Axis Technology ETF and Axis Consumption ETF.

Amitabh Choudhary, managing director and chief executive officer of Axis Bank, the parent of Axis Mutual fund, told CNBC-TV18 on May 23 that the suo moto investigation will continue for 4-6 weeks and that it has expanded the ambit of the probe to look at other equity analysts too.

Axis MF is the seventh-largest mutual fund in the country, with Rs 2.59 lakh crore of assets under management.