New Delhi- In a latest development in the alleged high-profile case involving Axis Mutual Fund, the Income Tax Department has frozen fixed deposits worth Rs 57 crore belonging to its former chief trader and fund manager , Viresh Joshi.
The IT department said the DFs of four separate banks were acquired through illegal means, including foreground operations, etc.
Front-running is the illegal use of prior information disclosed to brokers by mutual fund staff. Advice on upcoming purchases gives the trader an edge over others and is a sure way to earn big bucks.
Previously, 12 fund managers who were on the IT department’s radar had been questioned in connection with the case.
Jinesh Gopani, head of equities at Axis MF, and Pawan Jhangiani, reseller at Axis MF, were reportedly questioned by IT managers.
On July 28, computer sleuths had raided the premises of Viresh Joshi who had been on their radar since May after discovering he was in possession of a Lamborghini car and luxury apartments in Mumbai.
It was alleged that Joshi acquired all of these assets through front-running.
IT officials had recorded statements from Joshi and a few other brokers. They also gathered information from SEBI before carrying out the raids.
Joshi was accused of taking kickbacks from brokers instead of sharing mutual fund advice. It was also alleged that the brokers paid him monthly. Joshi is said to have invested in mutual funds buying many mid and small cap stocks for the benefit of brokers and himself.
In May, the IT department formed a team of its elite managers to investigate the alleged scam involving Axis Mutual Fund.
Since then, a dozen fund managers, including Joshi, have been on the taxman’s radar.
IT officials found that the defendants failed to provide details of their real estate, including business and non-business assets, in their tax returns. (IANS)