axis mutual fund front-running: Axis mutual fund front-running: ED registers case under FEMA, conduct raids

On Monday, the Enforcement Directorate (ED) conducted raids on the premises linked to Viresh Joshi, the former chief dealer at Axis Mutual Fund, in a front-running case reported in 2022. The ED has also registered a case under FEMA as Joshi was allegedly sharing specific trade-related information with brokers, middlemen and related people located in Dubai.

In February last year, Sebi had barred Joshi and 20 other entities from the securities market for indulging in front-running activities. The regulator alleged these entities collectively earned wrongful gains to the tune of Rs 30.56 crore from their trading activities, which it had directed to be impounded.

Joshi is alleged to have passed on information of impending large trades by his employer Axis Mutual to his aides who took positions before the fund house executed the transactions.

Besides Sebi and ED, the Income Tax department has also been probing the case and had last year attached Rs 57 crore of fixed deposits maintained by Joshi, claiming that the funds were alleged proceeds of illegal trades.

Investigators found that Joshi had at least six residential properties in Mumbai. He has two flats in the plush locality of Lower Parel and four flats in suburban Ghatkopar.

The investigation was triggered by a letter that Axis Mutual Fund’s top management received questioning about Joshi’s lifestyle.Joshi’s employment was terminated following an investigation by a forensic auditor appointed by the asset manager. In June 2022, Joshi had sued the fund house seeking Rs 54 crore in damages for alleged wrongful termination and not following due process of law.(Inputs from ET Bureau)