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Axis Mutual Fund probe: IT raids Viresh Joshi, the former fund manager


Mumbai: The Income Tax Department carried out searches at premises linked to Viresh Joshi, a former chief trader and fund manager of Axis Mutual Fund, a few middlemen and several brokers over the weekend over suspected tax evasion.

Joshi, who was sacked by the asset management company in May amid allegations of wrongdoings including front-running and receiving kickbacks from brokerages, is also being investigated by the Securities and Exchange Board of India for violations of the securities law.

The focus of the I-T probe is to find if there were any offshore investments by Joshi and the others under the scanner, people in the know said.



Tax officials had sought details from Sebi after the market regulator searched 16 entities including offices of Axis Mutual Fund, stockbrokers and some other individuals, said a person familiar with the developments.

Front-running, which Joshi is accused of, is trading stocks or any other financial assets by a broker who has inside knowledge of a future transaction that is about to affect its price substantially.

Agencies claimed to have found that Joshi made close to 60 crore in two-three years. His salary at Axis MF was way lower.

Investigators have also found that the income disclosed in tax returns and his investments were disproportionate to his income. Joshi has at least six residential properties in Mumbai — two flats in the plush locality of Lower Parel and four flats in suburban Ghatkopar, the people said.

sebi

Joshi was not immediately available for comment. His counsel, Chirag Shah, declined to comment.

The people with knowledge of the matter said Joshi and the brokers under the scanner were questioned during the raids, which commenced on Saturday.

“Sebi has found certain transactions that point towards Joshi being involved in front-running and thereby accumulating assets disproportionate to his income. There are allegations of tax evasion and siphoning of funds abroad and the same are being ascertained,” said a person.

“It’s more than a front-running case. Last 18 months, Joshi was carrying out illegal activities through several entities. The entire work from home situation was misused by him,” said another person familiar with the development.

“Sebi’s investigation is still going on; it is recording statements of entities involved. Once the probe is completed, all the information gathered would be officially communicated to all the relevant agencies,” the official added.

A letter received by Axis Mutual Fund’s top management, raising questions about the lifestyle of Joshi, was the trigger for the investigation. His lifestyle came under scrutiny as it was speculated that he drove a premium sports car. The car is not owned by him but belongs to someone else, the people said. Investigators found this out when they went to search his premises. Joshi’s employment with Axis MF was terminated following a probe by a forensic auditor appointed. The probe was conducted to ascertain whether its executives were involved in front-running, received kickbacks and executed trades that were disadvantageous to the schemes.



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