Court accepts ED’s complaint in Axis mutual fund money-laundering case

The court has issued summons to six accused, including former chief dealer Viresh Joshi and his family members

MUMBAI: A special court under the Prevention of Money Laundering Act (PMLA) has taken cognisance of an Enforcement Directorate (ED) prosecution complaint alleging the money laundering of over ₹106 crore linked to an alleged front-running scheme involving confidential trading information from Axis Mutual Fund. The court has issued summons to six accused, including former chief dealer Viresh Joshi and his family members.

In an order passed last week, additional sessions judge RB Rote said 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. The court observed, “considering the allegations in the prosecution complaint… it prima-facie reveals that there are sufficient grounds for proceeding against the accused,” and directed that summons be issued to all six accused

Besides Joshi, the court has issued summons to his father Gangaram, wife Vaishali, brother Vipul, and alleged associates Sumit Desai and Pranavkumar Vora. The court also extended Joshi’s judicial custody until March 20.

According to the ED, the money-laundering probe stems from an FIR registered by the Sion police in December 2024 following a complaint by an investor alleging cheating and criminal conspiracy. The agency claims that Joshi, while working as chief dealer at Axis Mutual Fund, shared confidential information about the fund house’s upcoming trades with associates, who then placed trades in advance, an illegal practice known as front-running.

Investigators allege that during the Covid-19 pandemic, when remote working was permitted, the accused misused access to sensitive trading information and shared it with associates who executed trades through accounts allegedly operated from Dubai.

The ED has estimated the proceeds of crime at around ₹106.74 crore and claims the money was routed through shell companies and accounts of family members before being used to purchase properties and other assets. Assets worth about ₹45.9 crore have already been attached under a provisional attachment order issued in September 2025.

Earlier in the investigation, the ED arrested Joshi under the anti-money-laundering law in connection with the alleged scheme and conducted searches across several cities as part of the probe.

During the pre-cognisance hearing, the accused argued that the allegations essentially concerned front-running, which falls under the jurisdiction of the securities market regulator, the Securities and Exchange Board of India (SEBI), and therefore could not form the basis of offences under the Indian Penal Code required for PMLA proceedings

They also contended that the ED complaint was invalid because it had been filed by an assistant director rather than the agency’s director.

Rejecting these arguments, the court said an FIR alleging offences such as cheating and criminal conspiracy, both scheduled offences under the PMLA, already existed. “At this premature stage, it cannot be said that there is no existence of a predicate offence,” the court said, noting that the FIR had neither been quashed nor had the accused been discharged from it.

The judge further held that the ED complaint was valid, referring to a central government order authorising officers not below the rank of assistant director to file complaints under Section 45 of the PMLA.

Emphasising that the court’s role at the cognisance stage is limited, the judge said a “mini trial” cannot be conducted at this stage and that the defence raised by the accused can be examined during the trial.

The order also notes that SEBI has 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.