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Let the investigation be brought to a conclusion. They should go behind bars if they have been found to be guilty, says HP Ranina, Senior SC Advocate.

What do you make of these irregularities which have erupted at Axis Mutual Fund? How have you read the details so far which have come out in the open?
Unfortunately, I am not aware of the details but let me just speak generally that in case there are any irregularities, obviously Sebi will take a very harsh look at this and they will face penalties and whatever other consequences that falls under the law. It is a matter of investigation and details. I am sure the mutual fund house has its own explanation for whatever has happened. The enquiry will now start from the regulator and once the enquiry is completed, then the consequences will follow.

Two senior fund managers have been sent on indefinite leave on charges of front running. There were charges of wrong processes being followed while buying smallcap, midcap names in seven schemes. The disproportionate ownership of some of the assets came out and hence the mutual fund started this enquiry and now Sebi has also stepped in. Is this also hitting the fragile investor sentiment?
You must understand that perhaps one cannot blame the mutual fund as an institution. After all, any institution has to rely on its senior employees and they have to trust their senior employees and if senior employees misbehave or do something which is contrary to the rules of the game or contrary to the Sebi regulations and other fund regulations, then obviously such employees have to be taken to task and have to be exposed. But to blame the fund as an institution may not be appropriate.

So I am glad that they have suspended those employees and launched the enquiries and now Sebi is going to step in and do its own independent enquiry as to these misdemeanors which have been done by these two senior executives. So let it be brought to a conclusion, they should go behind bars if they have been found to be guilty and punishment is given to them so that the investors have confidence in these mutual funds.


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