New Delhi, Axis Mutual Fund said on Friday that it has been conducting a suo moto investigation over the last two months since February.

The remarks came after it was revealed that SEBI is examining whether fund managers at Axis Mutual Fund engaged in "front-running" or trading securities through their personal accounts ahead of the fund's transactions, multiple reports said.

The asset management company (AMC) has used reputed external advisors to aid the probe, Axis MF said.

"As part of the process, two fund managers have been suspended pending investigation for potential irregularities," the AMC said.

"We take compliance with applicable legal/regulatory requirements seriously, and have zero tolerance towards any instance of non-compliance," it added.

"The media is requested not to give credence to market speculation and idle gossip, which are baseless and we strongly refute the same," the statement said.

Earlier, it was reported that a Lamborghini seems to have blown the lid of a huge front-running scandal in a private sector mutual fund.

There were loud whispers of a Rs 1,000 crore scam in a large mutual fund owned by a leading private sector bank involving front-running by the fund managers and dealers.

The said fund manager seems to have been using a Lamborghini and buying luxury apartments in and around Mumbai. He is said to be on the payrolls of brokers, and had accumulated small and midcap stocks on behalf of the mutual fund.

Axis Mutual Fund has carried out changes in fund manager responsibilities with effect from May 4 and Viresh Joshi, who was handling Axis Arbitrage Fund, Axis Banking ETF, Axis Consumption ETF, Axis Nifty ETF and Axis Technology ETF, does not find a mention in the new responsibilities.

Deepak Agarwal also does not find mention in the new structure.

As per Twitter comments, there is speculation that these two have been fired from the fund.

The same comments suggest that Joshi made Rs 500 crore and owned 14 apartments around Mumbai.

Joshi was said to be instrumental in buying small and midcap stocks and boosting them to place with the mutual fund once they crossed a certain size threshold.

There is also talk that this may be rampant in the Indian mutual fund industry, and what some said on Twitter, is an industry practice.

It is learnt that the CEO, Chandresh Nigam, is also under fire for overlooking these practices. Some of the holdings of the fund may face pressure in the markets as buzz spreads around this scandal.