Mumbai, Sep 5 (PTI) A special court here denied bail to a former chief trader and fund manager of Axis Mutual Fund in a money laundering case, citing that economic offences affect the socio-economic condition
and financial systems of the country.
The court noted that there were serious allegations against the accused, Viresh Joshi, of misappropriating Rs 91 crore belonging to the investors.
Special Judge R B Rote last week rejected Joshi’s bail plea in a case under the Prevention of Money Laundering Act (PMLA).
A detailed order was made available on Friday.
Joshi was arrested by the probe agency last month.
The Enforcement Directorate (ED) has alleged that Joshi, while working as a chief dealer, misused his position by sharing confidential information about the fund’s impending large-scale trades with associates for personal gain.
Joshi allegedly utilised remote working permissions during the COVID-19 pandemic to set up illegal operations on a large scale.
Between September 2021 and March 2022, he, along with his associates, orchestrated a massive fraud by using confidential insider information to conduct illegal trading activities, the ED has alleged.
The probe agency claimed that they had generated illegal profits of Rs 30.56 crore during this phase.
Joshi laundered around Rs 91 crore through bank accounts held by his family members and used the funds to acquire properties in India and abroad, it stated.
Joshi, through his lawyer, submitted that his role was purely administrative, with no discretion over trading decisions.
He contended that SEBI itself has quantified, and the other notices have entirely disgorged the alleged gain of Rs 30.56 crore arising from the front-running allegations.
Therefore, in the absence of any remaining illicit profit, the very foundation of PMLA detention vanishes, he submitted.
Front-running refers to an unethical and illegal practice in the securities market in which brokers or traders execute orders for their own benefit using advance knowledge of pending client orders.
Joshi’s defence was that Rs 91 crore has already been recovered by the authorities — the SEBI and the Income Tax department.
The court, however, noted that merely because they have deposited Rs 30.56 crore as per SEBI’s order, it does not mean the accused is absolved from the offence of money laundering.
Money laundering is a distinct and standalone offence, it held.
It pointed out that the case records showed that the ED collected sufficient material to prima facie show that Joshi committed money laundering.
The court noted that it is a serious economic offence of money laundering “affecting the socio-economic condition of the society and the financial systems of the country”.
The investigation is still in progress, and granting bail could lead to the accused tampering with evidence and influencing witnesses, it added. PTI AVI ARU
