Axis AMC Settles Sebi Probe on Front-Running Allegations

Axis Asset Management Company and several former executives have settled a Sebi case involving alleged failures in preventing front-running of Axis Mutual Fund trades by dealers. The settlement involved a Rs 6.27 crore payment without admitting or denying the violations, following a comprehensive Sebi investigation.

Axis Asset Management Company (AMC) and former executives have resolved allegations of regulatory failures in monitoring dealer activities, leading to the front-running of trades in Axis Mutual Fund. The settlement involves payments totaling Rs 6.27 crore to the Securities and Exchange Board of India (Sebi), according to official documents released on Monday.

The case also encompassed former compliance officer Darshan Kapadia, ex-equity head Jinesh Gopani, and ex-dealer Pawan Jhangiani. An investigation had revealed that Axis AMC failed to prevent unauthorized access to the dealing room, allowing dealers—and specifically one, Viresh Joshi—to front-run trades.

The forensic examination by Alvarez & Marshal India, Deloitte Touche Tohmatsu India, and BDO India LLP substantiated these violations. Following the incident's emergence, 21 entities were banned from the securities market, and Chandresh Kumar Nigam, former CEO of Axis AMC, stepped down in March 2023.

(With inputs from agencies.)