Front running row: Axis AMC sacks fund manager Viresh Joshi

Days after launching an internal probe into the allegations of irregularities in some of its fund schemes, Axis Asset Management Company (AMC) has said it has sacked chief trader and fund manager Viresh Joshi with effect from May 18, 2022.

With this, Joshi ceases to be the key person of Axis AMC, says the company in a statement. The fund has initiated a suo moto internal investigation into the allegations of wrongdoings and front running using "reputed external advisers".

"Further to our investigation, his conduct and following the decision to suspend him, the employment of Viresh Joshi (chief trader and fund manager) with Axis AMC has been terminated with effect from May 18, 2022, and he will no longer have any association whatsoever with Axis AMC and Axis Mutual Fund.

Accordingly, Viresh Joshi ceases to be a key person of Axis AMC," says the statement, adding that the company has "zero tolerance" towards any instance of no-compliance.

Axis AMC had earlier placed two of its fund managers -- Viresh Joshi and Deepak Agrawal -- on suspension, citing pending investigation against them. Following this, Axis Mutual Fund announced a change in fund managers of its seven schemes from May 4. The names of these two fund managers were missing from the revised list.

Joshi was the head trader for Axis Mutual Fund and Deepak Agrawal was an equity research analyst and fund manager for Axis Consumption ETF. It is not clear whether Deepak Agrawal has been reinstated in the company or not, and we’ll update the story when the information is available.

There were allegations that they indulged in ‘front running’, a prohibited practice, in which a broker exploits market-moving knowledge not available to the public for gains.

Axis AMC founder CEO Rajiv Anand on May 9 said the company would address if there was a problem. Slamming reports on the two dealers' suspension, he urged not to malign the reputations of the "highly skilled professionals".

"As the founder CEO of Axis MF am deeply distressed with the rumour mongering. If there is a problem we will address it. Do not malign the reputations of the highly skilled professionals that run the fund and have the trust of lakhs of investors," says his tweet on May 9.

Before the rejig, Joshi was one of the heads of Axis Arbitrage Fund, Axis Banking ETF, Axis Consumption ETF, Axis Nifty ETF, and Axis Technology ETF. In Axis Arbitrage Fund, Ashish Naik has replaced Joshi, while Naik alone handles Axis Nifty ETF. Axis Technology ETF, which was jointly headed by Joshi and Jinesh Gopani, is now handled by the latter only.

Deepak Agrawal, earlier part of Axis Value Fund, Axis Quant Fund, and Axis Consumption ETF, is no longer be part of these schemes. Instead, these schemes are handled by Jinesh Gopani (Axis Value Fund) and Ashish Naik.

The Axis AMC probe had started after complaints by some brokers against one of the dealers. The dealer (Joshi) allegedly received kickbacks from some brokers for executing trades way higher than the market and sharing confidential information. The dealer was also accused of a flashy lifestyle, including owning sports luxury cars and several real-estate properties.