Money Laundering Case: Mumbai Court Refuses Bail To Ex-Axis MF Fund Manager

money laundering case

A special court in Mumbai has refused bail to Viresh Joshi, former chief trader and fund manager of Axis Mutual Fund, in connection with a money laundering case.

The court emphasized that economic offences have a direct impact on the socio-economic fabric and financial systems of the country.

Special Judge R. B. Rote, while rejecting Joshi’s plea last week, said the allegations against him were grave, involving misappropriation of ₹91 crore belonging to investors. A detailed order was released on Friday. Joshi was arrested by the Enforcement Directorate (ED) last month under provisions of the Prevention of Money Laundering Act (PMLA).

Allegations

According to the ED, Joshi exploited his position as chief dealer by sharing confidential information about the mutual fund’s impending large trades with associates. This allowed them to gain illegal profits at the expense of investors.

The probe agency further alleged that during the COVID-19 pandemic, Joshi misused remote working permissions to expand these illegal activities. Between September 2021 and March 2022, he and his associates reportedly carried out a large-scale fraud by engaging in front-running, a practice where advance knowledge of trades is misused for personal benefit.

The ED claimed that the group generated illegal profits worth ₹30.56 crore during this period. Joshi allegedly laundered around ₹91 crore through bank accounts held by his family members, which was then used to acquire properties both in India and abroad.

Defence Arguments

Joshi, through his counsel, argued that his role at Axis Mutual Fund was largely administrative and that he had no discretionary powers over trading decisions. He pointed out that the Securities and Exchange Board of India (SEBI) had already quantified the gains from the alleged front-running at ₹30.56 crore and that the entire amount had been disgorged.

He further contended that since both SEBI and the Income Tax Department had already recovered funds, there was no remaining illicit gain, weakening the grounds for prosecution under PMLA.

Court’s Findings

The court, however, dismissed these arguments. It held that depositing ₹30.56 crore under SEBI’s order did not absolve the accused of money laundering. “Money laundering is a distinct and standalone offence,” the order stated.

The judge also noted that the ED had collected sufficient material to prima facie establish Joshi’s involvement. Considering the seriousness of the crime, the ongoing investigation, and the risk of tampering with evidence or influencing witnesses, the court refused to grant bail.