Axis MF gets new head in B Gopkumar, CEO Chandresh Nigam steps down

Axis Securities's managing director and chief executive officer (CEO), B Gopkumar has taken over as the new CEO of Axis Mutual Fund after Chandresh Nigam stepped down from the post of CEO. Axis Mutual handled assets worth Rs 2.48 lakh crore as on December 31, 2022.

Axis Mutual Fund has been entangled in the front-running scandal that came to light in 2022. Following the news, its former chief dealer Viresh Joshi was suspended after he was found guilty in an internal investigation. Following this, income tax raids were conducted at Joshi’s premises. In response, Joshi sued his former employer for wrongful termination.

Market regulator Securities and Exchange Board of India (Sebi) on February 28 said it has barred Joshi and 19 others in a front-running case linked to the fund house.

Front-running is an illegal practice in the stock market where an entity trades on the basis of advance information from a broker or analyst before the information reached their clients.

The market regulator has ordered impounding wrongful gains worth Rs 30.56 crore earned by them through "prima facie" front-running activities, according to an interim order.

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Sebi further said that Joshi was found to be passing on information of impending large trades by his employer Axis Mutual to his aides who took positions before the fund house executed the transactions.

Sebi said that the probe, which was done between September 1, 2021, and March 31, 2022, showed that front-running trades were executed from the trading accounts of Marfatia Group, Woodstock Group and Kurani Group.

Sebi noted that Joshi "glaringly abused" his employment as a dealer with Axis MF by "taking pecuniary advantages of the non-public information about the impending orders of his employer fund, i.e. Axis MF (Big Client), for his personal gains".

Sebi added that Joshi took advantage of the lack of physical official supervision during the Covid period when several employers had allowed employees to work from home. “…due to the Covid pandemic apart from having the option to work from home, the dealers of Axis MF were also given separate dealing rooms to ensure social distancing," said Sebi.

The market regulator added that Joshi had incorporated a company in Dubai for transferring the wrongful gains using clandestine channels in the bank accounts to create false records so as to evade detection. During the probe, Sebi found the entities connected to Joshi had traded in different securities ahead of the impending orders placed on behalf of the fund house.
 

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