Mumbai: During the Covid-19 pandemic, when people across the country were grappling with lockdowns and workplaces were trying to adapt to the circumstances by introducing remote work, Viresh Joshi, a fund manager at Axis Mutual Fund, exploited the conditions and orchestrated an elaborate ₹106.74-crore fraud with the help of his associates and shell firms, the Enforcement Directorate (ED) has told a special Prevention of Money Laundering Act (PMLA) court.
According to the ED’s charge sheet which the court took cognisance of on March 6, Joshi and others took advantage of the lack of direct supervision during the pandemic and made illegal profits by exploiting advance knowledge of large client trades to buy or sell stocks for personal gain, known as front-running. The front-running trades were allegedly conducted between September 2021 and March 2022, using sensitive data from Axis MF, which manages assets worth more than ₹2.5 lakh crore, the charge sheet said. Out of the total proceeds of crime (POC) worth ₹106.74 crore in the case, ₹104.54 crore or 97.93% was linked to Joshi, it noted.
On March 20, the special court extended Joshi’s judicial custody till April 1, while granting release on bond to co-accused S Desai.
Misusing pandemic relaxations
According to the ED’s submissions before the special court, the central agency launched its probe in the case in January 2025, based on an FIR registered by the Sion police on December 23, 2024. Joshi, then Chief Dealer at Axis MF, was arrested in August 2025.
The ED’s probe revealed that during the pandemic, Axis MF dealers worked without any immediate physical supervision as they had the option of working from home or sitting in separate dealing rooms while at office to ensure social distancing. As Chief Dealer at Axis MF, Joshi had access to confidential information regarding the company’s schemes and policies; he misused the working conditions during the pandemic to pass on such information to other accused for executing front-running trades, the ED found.
Between September 2021 and March 2022, Joshi and his associates “orchestrated a massive fraud” by using confidential insider information to conduct illegal trading activities, adversely impacting the financial standing of Axis MF and its investors, the charge sheet submitted by the ED said. It named three of his immediate family members among five other accused – his wife Vaishali, brother Vipul, father Gangaram and two alleged associates, S Desai and PK Vora.
Joshi, along with co-accused Desai and Vora, colluded to execute a sophisticated scheme to defraud investors, while a suspect identified as P Kurani disseminated confidential information to unauthorized trades, the ED alleged in the charge sheet. The accused were directly involved in unauthorised transactions and manipulated trading accounts, primarily based in Dubai, while Kurani oversaw these accounts and conducted illegal trading via computerised trading terminals. Through these activities, the accused generated illegal profits for Marfatia Group ( ₹9.49 crore), Woodstock Group ( ₹14.07 crore) and Kurani Group ( ₹6.99 crore), according to the ED’s probe documents.
Out of the total POC worth ₹106.74 crore, the biggest chunk, ₹104.54 crore, allegedly went to Joshi, while ₹2 crore allegedly went to Desai, and ₹20 lakh allegedly to Vora. The funds were routed through a complex web of shell entities and accounts controlled by the accused, their associates, and family members. Joshi used a vast nexus of shell firms to route the POC to bank accounts of family members and he used the POC to acquire several immovable assets in India and abroad in his and family members’ names, the charge sheet said.
Out of the ₹104.54 crore POC linked to Joshi, ₹57 crore was received from various shell entities in the account of Vibgyor Capital Holding Pvt Ltd, registered in the name of his brother and father; the amount was used for investing in fixed deposits with various banks. Another company in Dubai linked to Joshi’s father and brother, Vintage Capital Investment LLC, further alienated and concealed the PoC.
“The huge assets acquired by the accused No.1 [Joshi] were generated from the PoC derived out of activities related to scheduled offence and the other accused have admitted this fact,” the ED told court.
The agency has so far provisionally attached assets worth ₹45.90 crore linked to the POC. It has also extensively analysed bank statements connected to the front-running transactions under its scanner.
Accused deny charges
Joshi’s lawyer questioned the validity of the ED’s chargesheet since it had been filed by an assistant director rather than the director. He submitted before the special court that allegations against his client were for “front- running activities” which did not constitute an offence under the Indian Penal Code; consequently, there was no predicate offence in existence. At the most, it would be an offence under the Securities and Exchange Board of India (SEBI) Act, 1992 and related regulations. But the SEBI had not filed any complaint in this regard, and hence, the police had no jurisdiction to register a case, the lawyer said. The cheating offence was not attracted by Joshi as he was merely working as an employee of Axis MF, he submitted.
Desai and Vora too denied the allegations against them, pointing out that there was no material to establish an act of cheating or identify who was allegedly cheated through any representation/ inducement. The duo also contended that there was nothing on record to show that they had any knowledge at the relevant time that Joshi had committed a scheduled offence and that the money arranged by him could be POC.
The prosecution however said that the SEBI had prima-facie held the involvement of Joshi and others in ‘front-running activities’ and ordered the impounding of ₹30.56 crore; the proceeding was still pending. The police FIR had also not been quashed or set aside and an ED assistant director was fully authorised to submit a charge sheet under PMLA, the prosecution said.
Court takes cognisance
In an order passed on March 6, additional sessions judge RB Rote said that the material placed before the court showed a prima facie case for proceeding against the accused for the offence of money laundering under the PMLA.
“Considering the allegations in the prosecution complaint… it prima-facie reveals that there are sufficient grounds for proceeding against the accused,” the court said, and directed that summons be issued to all six accused.
It also extended Joshi’s judicial custody till March 20 while granting release on bond to co-accused Desai.
Overruling the defence’s arguments, the court said that an FIR alleging offences such as cheating and criminal conspiracy, both scheduled offences under the PMLA, already existed, and the ED complaint was valid. The judge emphasised that the court’s role at the cognisance stage was limited, and a “mini trial” could not be conducted at this stage; the defence raised by the accused could be examined during the trial, he said.
The order also notes that SEBI had carried out its own probe into the alleged front-running trades and issued an interim order seizing ₹30.56 crore in alleged wrongful gains from entities linked to the transactions. Those proceedings are still continuing before the regulator, the court said.