New Delhi, Aug 18 : In a recent development in the suspected front-running case that involves Axis Mutual Fund, the Income Tax Department has freezed fix deposits of the sum of Rs 57 crore, belonging to the chief trader and fund manager Viresh Joshi.The I-T Department said that the FDs in four banks were obtained through illegal methods, such as front-running, etc.
Front-running is the unauthorized use of information that was divulged to brokers by staff from mutual funds.Tips for buying in the near future give traders an advantage over other traders and is a sure method to earn large sums of money.
In the past twelve manager of funds who were under the radar of the I-T Department were questioned in connection with the investigation.
Jinesh Gopani, head of equity at Axis MF, and Pawan Jhangiani who is dealer at Axis MF, were reportedly interrogated by I-T officials.
On the 28th of July, the I-T investigators conducted raids on the property of Viresh Joshi, who had been in their watch since May when it was discovered that he was in possession of the Lamborghini car and luxurious apartment in Mumbai.
It is claimed that Joshi obtained all of these assets via front-running.
The I-T officials had recorded the statements of Joshi and some other brokers.They also collected information from SEBI prior to conducting the raids.
Joshi was accused of accepting bribes from brokers in place of giving tips regarding mutual funds.It is also claimed that brokers paid him monthly.
Joshi was allegedly investing in mutual funds purchasing several small and midcap stocks in order to benefit brokers as well as his own.
In May the I-T Department had formed a team of its top officials to investigate the allegations of a front-running fraud that involved Axis Mutual Fund.
Since then, about 12 fund managers including Joshi are under the radar of the department of tax.
The I-T officials discovered that the individuals in question did not provide details of their real estate assets which included commercial and non-commercial properties, in their tax returns.
atk/arm
