The Enforcement Directorate (ED) on September 9 conducted searches at several locations in Mumbai and Kolkata as part of an ongoing investigation under the Foreign Exchange Management Act (FEMA), related to Axis Mutual Fund.
In a statement issue on September 11, the agency accused Viresh Joshi, a former chief trader and fund manager at Axis Mutual Fund, of sharing market-sensitive information in exchange for kickbacks from brokers as part of a front-running scam.
"Movable properties, including foreign currencies such as GBP, Euro, and AED amounting to Rs 12.96 lakh, as well as various incriminating documents linked to overseas immovable properties, overseas bank accounts, and digital devices, were seized," the ED said.
The agency alleged that Joshi shared market-sensitive information with brokers operating out of Dubai, who executed trades based on his instructions. It also claimed that Joshi contacted individuals and entities in India, renting their trading accounts to carry out these transactions.
The "illicit gains" from these trades were reportedly received by Joshi in cash from the brokers, the ED added. The funds were further utilised to create fixed deposits and purchase properties in India.
The ED's probe follows a 2022 Income Tax Department raid on Joshi related to the same case. The investigation was triggered by an interim order from the Securities and Exchange Board of India (SEBI), which alleged that Joshi and others engaged in front-running, generating wrongful gains amounting to Rs 30.56 crore.
The ED also claimed that Joshi routed the cash through Kolkata-based operators into the bank accounts of several shell entities. These entities allegedly provided unsecured loans to Joshi, his family members, and firms owned by them.
The proceeds from the front-running scam were reportedly used to buy properties abroad, with documents seized showing the purchase of two properties in the UK. The agency said that Rs 14 crore had been remitted abroad for this purpose.
(With inputs from PTI)
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