The Indian partner of global financial manager Schroders Plc is under investigation by the country’s capital goods regulator for allegedly being sued by two of his employees, according to people familiar with the matter.
The Security and Exchange Board of India is reviewing the finances managed by Viresh Joshi and Deepak Agarwal at Axis Asset Management Co., the people said, refusing to be named because they did not have the authority to speak to reporters. Axis AMC is India’s seventh-largest asset manager with 2.5 trillion rupees ($ 32 billion) in assets.
Sebi did not respond to an email seeking comment. Schroders, which owns a 25% stake in Axis AMC by Schroders Singapore Holdings Pvt., Declined to comment. Joshi does not respond to calls and messages, and Agarwal’s phone is turned off. Axis AMC on Friday said it had suspended two unnamed financial managers pending an internal investigation. He declined to comment when he arrived on Monday.
“There are no restrictions on redemptions,” Chandresh Nigam, managing director at Axis Mutual Fund, said in a letter to investors on Sunday, a copy seen by Bloomberg News. “In any event, we believe the liquidity associated with our funds and the quality of our portfolio will enable us to meet redemption requirements from investors, of any kind.”
Indian equity securities have spread billions of dollars in payments over the past two years amid a boom in retail investment. The S&P BSE Sensex landscape index of products hit an all-time high in October.
Increased participation of retail banks is fueling pressure on the new Sebi chairman Madhabi Puri Buch to quell the irregularities.
It has dealt with such events that the front was running very hard in the past. In a June 2021 order, Buch, then full-time director at Sebi, regulated 20 companies including dealers at Reliance Securities Ltd. from trading for futures businesses in the Tata Absolute Return Fund.
Ideas managed by Joshi and Agarwal include Axis Arbitrage Fund, Axis Banking ETF, Axis Consumption ETF, Axis Nifty ETF, Axis Quant Fund, Axis Technology ETF and Axis Value Fund.
The Axis Arbitrage Fund is the largest managed by either of the two managers, with assets worth nearly 58 billion rupees. Money and liquid assets make up more than half. The active management funds, Axis Value Fund and Axis Quant Fund, account for more than 3% of their portfolio in cash.
“At this point, we want to have the right balance. We are not too angry on the white list or any reduction, ”said Nirav Karkera, head of research at Fisdom, an investment consulting firm, referring to funds managed by Axis MF.
Shares of companies in which Axis MF became more than 4% hit on concerns over the implementation of the process. These include Coforge Ltd., which has fallen 8.6% since Friday, Torrent Power Ltd., which lost 8%, and Info Edge India Ltd., which dropped 9%.