NEW DELHI: The Enforcement Directorate (ED) on Wednesday accused Viresh Joshi, a former chief trader and fund manager at Axis Mutual Fund, of sharing sensitive market information with brokers in Dubai in exchange for “kickbacks” as part of a front running “scam”.
The central probe agency further said that movable properties in the form of foreign currencies like GBP, Euro, and AED amounting to Rs 12.96 lakh, various incriminating documents pertaining to overseas immovable properties, overseas bank accounts and digital devices were seized during the raids conducted on September 9 in Mumbai and Kolkata as part of an investigation under the Foreign Exchange Management Act (FEMA).
According to the ED, Joshi received “illicit gains” in cash from brokers through the mentioned trade. These funds were then channeled by Kolkata-based operators into the bank accounts of various shell entities, which subsequently provided “unsecured” loans to Joshi, his family members, and companies under their beneficial ownership.
The agency stated that a portion of the “illegal gains” derived from front running, amounting to Rs 14 crore, was used to acquire immovable properties in the UK, with documents related to two such properties being discovered.
“Joshi was allegedly sharing market-sensitive information in return for kickbacks from brokers having terminal in Dubai who could execute the trade on his instructions. He also contacted few other individuals and entities based in India who could lend their trading accounts on a rental basis,” the central agency claimed.
Furthermore, the ED alleged that overseas entities, including Vintage Capital Investment LLC in Dubai and Vincent Capital Holding Limited in the UK, were established using these funds, with “illegitimate gains” totaling Rs 12 crore being parked in their accounts. The funds were also utilized to create fixed deposits and purchase properties within India.
The ED’s action was initiated based on an interim order issued by the Securities and Exchange Board of India (SEBI), which alleged that Joshi and others engaged in “front running” to earn illegal profits of Rs 30.56 crore.
Meanwhile, Joshi had also been raided by the Income Tax Department in August, 2022 in connection with the same case.
Front running is a practice in the securities market where a broker or trader executes orders on a security for their own account, taking advantage of advance knowledge of pending orders from their customers. The ED considers this practice to be unethical and illegal, as it compromises market integrity and disadvantages other investors.
The central probe agency further said that movable properties in the form of foreign currencies like GBP, Euro, and AED amounting to Rs 12.96 lakh, various incriminating documents pertaining to overseas immovable properties, overseas bank accounts and digital devices were seized during the raids conducted on September 9 in Mumbai and Kolkata as part of an investigation under the Foreign Exchange Management Act (FEMA).
According to the ED, Joshi received “illicit gains” in cash from brokers through the mentioned trade. These funds were then channeled by Kolkata-based operators into the bank accounts of various shell entities, which subsequently provided “unsecured” loans to Joshi, his family members, and companies under their beneficial ownership.
The agency stated that a portion of the “illegal gains” derived from front running, amounting to Rs 14 crore, was used to acquire immovable properties in the UK, with documents related to two such properties being discovered.
“Joshi was allegedly sharing market-sensitive information in return for kickbacks from brokers having terminal in Dubai who could execute the trade on his instructions. He also contacted few other individuals and entities based in India who could lend their trading accounts on a rental basis,” the central agency claimed.
Furthermore, the ED alleged that overseas entities, including Vintage Capital Investment LLC in Dubai and Vincent Capital Holding Limited in the UK, were established using these funds, with “illegitimate gains” totaling Rs 12 crore being parked in their accounts. The funds were also utilized to create fixed deposits and purchase properties within India.
The ED’s action was initiated based on an interim order issued by the Securities and Exchange Board of India (SEBI), which alleged that Joshi and others engaged in “front running” to earn illegal profits of Rs 30.56 crore.
Meanwhile, Joshi had also been raided by the Income Tax Department in August, 2022 in connection with the same case.
Front running is a practice in the securities market where a broker or trader executes orders on a security for their own account, taking advantage of advance knowledge of pending orders from their customers. The ED considers this practice to be unethical and illegal, as it compromises market integrity and disadvantages other investors.
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