Axis Mutual Fund said on Tuesday there are “strong reasons” to believe that Viresh Joshi and Deepak Agrawal, the two fund managers who were sacked by the company in June, may have breached the securities law.

Axis Asset Management Co, India’s seventh-largest mutual fund house with assets worth Rs 2.43 trillion, had sacked Joshi on May 18, and Agrawal, his former colleague and assistant fund manager, on May 20.

The action against them was taken in connection with a suspected front-running case.

Axis MF 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), it said.

Axis AMC claimed that based on the findings, so far, it believed the conduct of the concerned individuals did not have any impact on liquidity or operations.

Any misconduct by the individuals was outside of and in contravention to policies and procedures and the training they had received, it said.

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.

Sebi had earlier carried out ‘search and seizure’ at 16 entities, including offices of Axis Mutual Fund, stock brokers and individuals, as part of the ongoing probe into suspected wrongdoings by two former fund managers of Axis MF.

Medium Brush Stroke

Click here to read more such interesting web stories and articles.