MUMBAI (Reuters) – India enforcement agency seized 1.29 million rupees ($15,360) during searches in Mumbai and Kolkata related to an ongoing investigation of front-running at Axis Mutual Fund, the agency said on Wednesday.
The Enforcement Directorate (ED) started its investigation last year after the country’s market regulator identified 305 million rupees in wrongful gains due to alleged front-running activities.
Front-running is a market malpractice of making personal gains by trading in securities ahead of large client orders.
The regulator had also barred 21 entities, including Viresh Joshi, the then chief dealer of Axis MF, from capital markets.
“Joshi was allegedly sharing market-sensitive information in return for kickbacks from brokers having terminals in Dubai who could execute trades on his instructions,” the ED said in a press statement announcing the searches.
Gains from these trades were received by Joshi in cash and routed through Kolkata-based entities, the ED added.
Joshi had been fired from Axis Mutual Fund. He could not be immediately be reached for comment.
In an emailed comment to Reuters, Axis Mutual Fund said Joshi has not been part of the company since May 2022.
“The recent action taken by the enforcement directorate is in connection with an individual whose employment was terminated as a result of a suo moto investigation undertaken by Axis AMC,” the fund house said.
($1 = 83.9700 Indian rupees)
(This story has been corrected to clarify that searches were conducted in Mumbai and Kolkata, not at offices of Axis Mutual Fund in Mumbai and Kolkata, in paragraph 1)
(Reporting by Jayshree P Upadhyay; Editing by Savio D’Souza and Shreya Biswas)
