Axis Mutual Fund has proactively taken action against those involved in “potential irregularities” and is working with the market regulator that has the power to do more, according to Amitabh Chaudhry, head of parent Axis Bank Ltd.
The regulator can “see much more” than the internal investigation can, Chaudhry, managing director and chief executive officer at parent Axis Bank Ltd., told BQ Prime’s Menaka Doshi on the sidelines of World Economic Forum summit in Davos on Monday. “They have the power to see much more and can investigate the way we cannot, and we will of course cooperate with SEBI.”
Axis MF has removed two fund managers over alleged irregularities. What one fund manager has done “looks more serious”, Chaudhry said referring to a potential “fund transaction”. But he declined to offer more details on the kind of transactions or what happened at the fund.
Chaudhry clarified that there is no whistleblower involved and the mutual fund began investigating after they heard “market chatter”. He later clarified that he “received a call” offering some information, following which they initiated the probe.
“Once we saw what we suspected, we suspended and not terminated them because we wanted explanation during the investigation,” he said. “Secondly, you want their cooperation. Once we crossed that bridge we terminated the two employees.”
While the investigation is still on, Chaudhry expects it to be closed within the next six to eight weeks.
However, he said, the “numbers involved” in the ongoing investigation at Axis Asset Management are “meaningless” compared with total assets of the fund.