News agencies on Thursday reported that two senior executives from Axis Mutual Fund, who are currently part of the investment company, were quizzed by Income Tax department in connection to a case of front running, money laundering and tax evasion.
The Income Tax Department under the Ministry of Finance was notified a few months ago by the Securities and Exchange Board of India (SEBI) regarding an alleged front-running case in Axis Mutual Fund by a former chief trader and fund manager at the mutual fund company.
Viren Joshi, who was a chief trader and fund manager at Axis Mutual Fund, allegedly used confidential information regarding companies to execute front-running deals in stock markets.
A report by The Business Standard suggests that 2 fund managers from Axis Mutual Fund Asset management company were grilled by the IT department on the allegations that Viren Joshi helped brokers and fund managers with mutual fund tips with sensitive information for money in return. Nearly 12 fund managers from the company are currently under the surveillance of the Income Tax department.
Head of Equity at the Axis Mutual Fund, Jinesh Gopani, along with Pawan Jhangaini, who is a dealer in the company, were reportedly quizzed by the department. There have been allegations that brokers made use of tips from Viren Joshi to make gains in the market and used to pay Mr Joshi every month for his tips and information.
Mr Viren Joshi, on the other hand, used front running top invest in small and mid-cap stocks to make huge financial gains.
SEBI, which is the securities and commodities market regulator of the country, has been investigating this matter for the last few months and had found evidence of money laundering and tax evasion being conducted by the accused fund managers.
The case, which began in January 2022, with an internal investigation by Axis Mutual Fund, took a turning point when the asset management company decided two fire two employees. An internal investigation conducted by the company found that Viren Joshi, along with his colleague, used front running to achieve financial gains.
The company, soon after the incident, reported it to SEBI, who took over the investigation in May 2022.
Viren Joshi, who was under radar of IT department since May 2022, purchased many luxurious apartments in Mumbai which were costlier than his assets and salary range.
SEBI and the IT department were surprised to find out luxurious vehicles and real estate assets owned by Viren Joshi, which was allegedly purchased using the money he illegally made from front running.
Along with Mr Joshi, other fund managers, who are under the radar of the IT department also allegedly own various luxurious flats and real estate plots around Mumbai which were not disclosed by them in their income tax filings.