Axis Mutual Fund has claimed that it followed all the regulations while sacking its chief trader and fund manager Viresh Joshi and fund manager Deepak Agarwal for their alleged front-running activities.
The fund house statement comes on the back of Joshi filing a petition in the Bombay High Court against Axis Mutual Fund for not following proper procedure while terminating his employment and claimed damages of ₹54 crore.
“We followed the required regulatory and compliance guidelines at all points of time and will continue to do so. The entire fund management (other than the two individuals) and top management team of the fund house remain intact and strongly focused on delivering value for investors,” said Axis Mutual fund on Tuesday.
Axis Asset Management Company claimed that it started suo moto investigation through reputed external advisors in February and the findings have been shared with the regulator.
“Joshi has committed clear breaches of our policies, including non-cooperation with our internal investigation (during his suspension period). We also have strong reasons to believe, based on available evidence, that there has been breaches of securities law by him,” Axis MF said.
However, Joshi in his petition claimed that the entire investigation was started after he pointed out unusual movement in stocks which he is buying and selling.
In his lawsuit, Joshi said that contrary to Axis AMC’s claim of receiving a tip-off from an external source alerting it to the alleged front-running activity, it was he who had first reported his seniors about increased activity in the shares he had been trading on behalf of the fund house last June.
Between November 2021 and January 2022, trading activity in the shares he dealt with, on behalf of the fund house, spiked and led to the fund house starting an investigation, said the lawsuit.
Axis AMC claimed that based on the findings, so far, it believed the conduct of the concerned individuals do not have any impact on the liquidity or on operations. Any misconduct by the individuals was outside of and in contravention to polices and procedures and the training they had received, it said.