ED arrests Viresh Joshi, Axis Mutual Fund scam mastermind, seizes Rs 17.4 crore worth shares, mutual funds, bank balances.
Joshi, the then Chief Dealer of Axis Mutual Fund, was arrested on Saturday under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, according to IANS.
“He was produced before the Competent Court, which granted his custody to the ED till August 8,” said the official in a statement.
Multi-City Search Operations
According to the ED, its headquarters office in New Delhi carried out search operations on Friday and Saturday in Delhi, Mumbai, Gurugram, Ludhiana, Ahmedabad, Bhavnagar, Bhuj, and Kolkata.
The investigation is linked to illegal profits made by certain entities and individuals involved in front-running trade activities in scrips traded by Axis Mutual Fund between 2018 and 2021.
Front-Running Network Uncovered
The probe was initiated based on an FIR registered by the Mumbai Police in December 2024. It alleged that Viresh Joshi, then Fund Manager of Axis Mutual Fund, exploited confidential information on trades to be executed on behalf of Axis Mutual Fund to pre-emptively trade stocks, generating substantial illicit gains.
“The accused has, thereby, cheated the investors of Axis Mutual Fund, which holds assets under management of more than Rs 2 lakh crore,” the ED said.
The agency added that Joshi used a trading terminal in Dubai to execute front-running trades through mule accounts acquired from various brokers. In addition to Joshi, “many other traders/brokers had also misused the advance inputs on Axis Mutual Fund Trades and indulged in front running to generate illicit trade profits, which is nothing but POC,” the ED stated.
The ED estimates that the proceeds of crime (POC) generated by traders and brokers identified so far exceed Rs 200 crore, with the figure expected to rise as the investigation continues.
The illicit funds were allegedly routed through multiple shell entities and bank accounts linked to the accused individuals and their families. The ED’s probe into these transactions is still underway.
Front-running, a practice at the core of this case, involves brokers or traders executing orders for their own benefit using prior knowledge of client trades, undermining market integrity and harming investors.
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