Axis Mutual Fund makes fund manager changes in 7 schemes as it probes irregularities

Axis Mutual Fund has implemented personnel changes, including stripping two fund managers of their roles, amid allegations of violations against certain officials of the fund house, according to people aware of the matter.

Chief trader and fund manager Viresh Joshi, assistant fund manager Deepak Agarwal are said to be among those affected by the changes.

"As part of the process, two fund managers have been suspended pending investigation of potential irregularities. We take compliance with applicable legal and regulatory requirements seriously, and have zero tolerance towards any instance of non-compliance," the statement read.

The names of the two officials are still on the website of Axis MF. Although the fund issued an addendum on May 4, announcing the fund management changes in the schemes that Joshi and Agarwal managed.

Moneycontrol was first to report the allegations of wrongdoing by a dealer at a large fund house in its MC Insider. Read: Lamborghini trail here. According to that report, there had been whispers of an audit by the market regulator into front-running cases within a top-tier asset management company. The main accused, the dealer, was said to have been painting the town red in a Lamborghini.

Nigam has been managing director and CEO of the fund house for almost a decade. The fund house started operations in 2009.

Joshi, who has spent over a decade at the fund house, will no longer be part of any Axis Mutual Fund scheme, the people said. He was the fund manager of five schemes – Axis Arbitrage Fund, Axis Banking ETF, Axis Nifty ETF, Axis Technology ETF and Axis Consumption ETF.

Agarwal, who was an equity research analyst and assistant fund manager of Axis Consumption ETF, Axis Quant Fund and Axis Value Fund, is said to be no longer part of these schemes.

The sources said the Bloomberg IDs of Joshi and Chandresh Nigam, MD and CEO of Axis MF, were deactivated since May 4 evening. This is assumed to be significant as it means that the said officials could be barred from the markets. In normal course, Bloomberg terminal IDs do not change even if fund managers change jobs as they still remain market participants and continue to use Bloomberg data even in their next jobs.

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