New Delhi: The Enforcement Directorate (ED), which has been investigating illegal trade activities related to Axis Mutual Fund, arrested scam mastermind Viresh Joshi and seized proceeds of crime (POC) in the form of shares, mutual funds and bank balance worth Rs17.4 crore during multi-city searches, an official said on Sunday.
Joshi, the then Chief Dealer of Axis Mutual Fund, was taken into custody on Saturday under the provisions of Prevention of Money Laundering Act (PMLA), 2002.
He was produced before a court which granted his custody to the ED till August 8.
ED officials conducted searches on Friday and Saturday at multiple locations in Delhi, Mumbai, Gurugram, Ludhiana, Ahmedabad, Bhavnagar, Bhuj and Kolkata, reported IANS.
Roots of scam
The search operations were part of an investigation into illegal profits made by certain entities/persons by indulging in front-running trade activities in scrips traded by Axis Mutual Fund from 2018 to 2021.
An FIR was registered by Mumbai Police in December 2024, alleging that Joshi, who was 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.
ED then initiated a probe, and said that the accused cheated investors of Axis Mutual Fund.
The accused, through a terminal in Dubai, punched the front-running trade orders through mule trading accounts obtained from various brokers.
In addition to Joshi, many other traders/brokers were found to have also misused advance inputs on Axis Mutual Fund Trades and indulged in front-running to generate illicit trade profits, which is POC.
According to ED, the POC generated by various traders/brokers is more than Rs 200 crore.
Proceeds of the fraud were funnelled through multiple shell entities and bank accounts beneficially owned by the accused persons/entities and their family members, which is under ED investigation.
