Axis MF Fund Manager Settles SEBI Case for Rs 85.8 Lakh, Surrenders MF Units
Deepak Agrawal, a fund manager at Axis Mutual Fund, has settled proceedings with SEBI by paying Rs 85.8 lakh and surrendering over 43,000 mutual fund units. The settlement follows allegations of violating market norms from April 2020 to September 2022, including providing stock tips, sharing confidential information, and engaging in unethical practices. Agrawal also surrendered 43,310.73 units from Axis Quant Fund and Axis Value Fund. SEBI reserves the right to reopen proceedings if any representations made during the settlement are found untrue.
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In a significant development in the mutual fund industry, Deepak Agrawal, a fund manager at Axis Mutual Fund, has settled proceedings with the Securities and Exchange Board of India (SEBI) by paying Rs 85.8 lakh and surrendering over 43,000 mutual fund units.
Allegations and Violations
The settlement follows allegations that Agrawal violated market norms during the period from April 2020 to September 2022. The violations, identified through a forensic audit of Axis Mutual Fund, included:
- Providing stock tips
- Sharing confidential information about securities positions with outsiders
- Engaging in unethical practices
- Non-disclosure of directorship in a private company
Additionally, Agrawal allegedly shared research reports intended for the mutual fund with external parties and influenced employees of listed companies to buy or sell securities that the mutual fund was trading.
Settlement Terms
Under the settlement terms approved in September:
- Agrawal paid Rs 85.80 lakh to SEBI
- He surrendered 43,310.73 units from Axis Quant Fund and Axis Value Fund
- The surrendered units were credited back to their respective schemes
Case Disposition
With the settlement, the case against Deepak Agrawal has been disposed of. However, it's important to note that SEBI reserves the right to reopen proceedings if any representations made during the settlement process are found to be untrue.
Industry Implications
This case highlights the importance of ethical conduct and confidentiality in the mutual fund industry. It serves as a reminder of the strict regulatory environment and the consequences of violating market norms.
The settlement demonstrates SEBI's commitment to maintaining the integrity of the financial markets and protecting investor interests. By taking action against individuals who violate market norms, the regulator aims to uphold trust in the mutual fund sector.
For Axis Mutual Fund, this settlement brings closure to a challenging episode. The fund house will likely be keen to reassure investors about its commitment to compliance and ethical practices in the wake of this incident.
As the mutual fund industry continues to grow in India, cases like this underscore the need for robust internal controls, regular audits, and a culture of compliance within fund houses to prevent such violations in the future.
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