Inside the rot at Axis Mutual Fund

Why read this story?

Editor's note: For the lay investor, Axis Mutual Fund was a safe, reliable, credible and consistent fund house to invest in. That faith has now been shattered as the asset management company has sent two of its top fund managers on forced leave over allegations of front-running trades.  Just last Wednesday, Axis Mutual Fund was conferred with the title of “best fund house” across equity and debt investment schemes by market research firm MorningStar India. But by Friday, its reputation had been fractured. The fund announced a change in its equity team leadership as it suspended chief trader and fund manager Viresh Joshi and assistant fund manager Deepak Agarwal over allegations that they pocketed crores of rupees by front-running trades.  Axis Mutual Fund, a joint venture between Axis Bank and UK-based asset manager Schroders, is the seventh-largest mutual fund company in the country, with Rs 2.59 lakh crore of assets under management. “The initial investigation has revealed that the ill-gotten gains from front-running would stand at about Rs 200 crore,” says an executive at Axis Mutual Fund, asking not to be named.  …