Axis Mutual Fund the asset management arm of Axis Bank announced that its chief executive officer (CEO) and managing director (MD) Chandresh Nigam has quit the company after Securities and Exchange Board of India's (SEBI) order regarding the front-running in the fund house surfaced. Nigam will be replaced by B Gopkumar MD and CEO of Axis Securities.
SEBI, via WhatsApp messages, had discovered that Viresh Joshi, who was former the chief dealer of Axis Fund was mastermind of front-running at the fund house. In September 2021 and March 2022, market regulator announced that Joshi had involved 20 plus people to make illegal gains worth Rs 30.6 crore by front-running.
The market regulator noticed that the front-running scheme involved placing orders in a way that the first segment of the trade got executed before orders of Axis MF. SEBI came to notice the frequency of these trades which was done to produce significant gains.
These fraud trades were executed by Sumit Desai as per Joshi’s instructions. Joshi along with another fund manager Deepak Agarwal were sacked from the fund in May 2022. A Dubai-based individual named Prijesh Kurani who was introduced to Joshi by Desai assisted in carrying out these deals.
The order issued by SEBI stated, “…the way Viresh Joshi has conducted himself as a dealer of Axis MF in conceiving a fraudulent scheme and executing the said scheme so meticulously over a sustained period in collusion with other unscrupulous entities to front-run the trades of his very own mutual fund, where approximately 6.6 million unitholders have put an aggregate sum of Rs 2.52 trillion (as on March 31, 2022), smacks of rampant dishonesty and unfairness on the part of Viresh Joshi and his accomplices.”