SEBI conducts raids on 16 entities in Axis MF case: Report

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Market regulator Securities and Exchange Board of India (Sebi) has carried out ‘search and seizure’ operations on 16 entities in more than 30 locations across the cities of Maharashtra and Gujarat as part of its ongoing probe of Axis Mutual Funds front-running case, Times Of India reported on May 28.

Reportedly, these searches, carried out this week, were part of Sebi’s ongoing investigation into allegations of front-running by two of Axis’s former fund managers. They were both fired from their positions last week by the company.

Moneycontrol could not independently verify the report.

The raids were conducted in the premises of fund house executive, stockbrokers, authorised persons of stockbrokers, and traders.

During the search operations, the regulatory body has seized various records, documents, and physical as well as digital evidence. All information is also extracted from mobile phones, laptops, desktops, tablets, and hard disks found in their care, according to the report.

Sebi’s raids were associated with suspected entities who might have been involved in dealing in stocks based on insider knowledge. Sebi’s operation covered various offices of Axis Mutual Funds and residential locations of some of its top executives and fund managers.

The matter came into the regulator’s lens when Axis Mutual Funds sacked two of its former fund managers, Viren Joshi and Deepak Agrawal, on the grounds of misconduct and breaking compliance rules. Meanwhile, Sebi had been receiving alerts and internal market information about front-running of trades activity at Axis MF since the past few months. National Stock Exchange (NSE) had also shared knowledge about the irregularities with the regulatory body.

Front running is an illicit market practice which involves purchasing or selling shares on the whiff of information that is not yet public. It is one of the most serious offences according to India’s regulatory body.