PMLA court grants bail to Vipul Joshi, father, wife in ₹107-cr Axis MF front-running case

The prosecution case centres on allegations that Vipul’s brother, former Axis Mutual Fund dealer Viresh Joshi, carried out systematic front-running (an illegal market manipulation based on advance non-public knowledge of a large pending client order)

MUMBAI: A special Prevention of Money Laundering Act (PMLA) court in Mumbai on Monday granted bail to Vipul Joshi, his father Gangaram Joshi and his wife Vaishali Joshi in the alleged ₹107-crore Axis Mutual Fund front-running money-laundering case. The accused had appeared before the court pursuant to summons and were formally taken into judicial custody in view of the non-bailable nature of the offence.

PMLA court grants bail to Vipul Joshi, father, wife in ₹107-cr Axis MF front-running case

The prosecution case centres on allegations that Vipul’s brother, former Axis Mutual Fund dealer Viresh Joshi, carried out systematic front-running (an illegal market manipulation based on advance non-public knowledge of a large pending client order). Joshi allegedly did this during the Covid-19 work-from-home period by exploiting confidential, price-sensitive information about impending fund trades. The Enforcement Directorate (ED) claims that he accessed advance knowledge of large buy-and-sell orders of mutual fund schemes and executed trades in the same securities ahead of those transactions, profiting from the price movements once the institutional orders were placed.

According to investigators, the trades were channelled through a network of brokers, shell entities and accounts operated in the names of associates and family members to disguise the origin of the funds. The alleged proceeds—estimated at over ₹100 crore—were subsequently layered through multiple bank accounts and investment instruments before being projected as legitimate, forming the basis of the money-laundering case.

The predicate offence, registered by the Economic Offences Wing (EOW), invokes cheating, criminal breach of trust, forgery and conspiracy provisions, which underpin the ED’s prosecution under the PMLA.

Allowing the bail applications, the court noted that none of the three accused had been arrested at any stage of the investigation or after the filing of the prosecution complaint, and that the ED had not exercised its powers of arrest under Section 19 of the PMLA. With cognisance already taken, the court held that the purpose of securing their presence could be achieved through bonds rather than custodial detention.

Relying on the Supreme Court’s ruling in Tarsem Lal vs Directorate of Enforcement, the court observed that once an accused appears pursuant to summons after cognisance, courts should ordinarily secure attendance through bonds instead of remanding them to custody. It further held that continued detention would be unwarranted in such circumstances.

The ED opposed the pleas, arguing that the accused had jointly in laundering the proceeds of crime and that their release could hamper the trial or lead to their absconding. The court, however, found that these concerns did not justify incarceration in the absence of prior arrest, and directed their release on personal bonds of ₹1 lakh each with sureties of like amount.