11 September 2024

On September 9, 2024, the Directorate of Enforcement (ED) conducted searches in Mumbai and Kolkata under the Foreign Exchange Management Act (FEMA) as part of an investigation into front running activities associated with Axis Mutual Fund. The searches resulted in the seizure of foreign currencies worth Rs. 12.96 lakh, incriminating documents, overseas bank accounts, and digital devices. The investigation stems from a SEBI order accusing Viresh Joshi and others of front running, which involves exploiting advance knowledge of customer orders for personal gain. Joshi allegedly shared sensitive market information for kickbacks from brokers in Dubai, who executed trades on his behalf. The proceeds were channeled through Kolkata-based operators to shell companies, which then lent funds to Joshi and his associates. 

These illicit gains were used to purchase properties in the UK, with Rs. 14 crore transferred abroad for this purpose. Additionally, funds were deposited into accounts of Dubai-based M/s Vintage Capital Investment LLC and UK-based M/s Vincent Capital Holding Limited, with Rs. 12 crore in illegitimate gains. Funds were also used for fixed deposits and property acquisitions in India.