Rs 300 cr illicit-gain charge: The MF ‘only thrived’ during his tenure and he got ‘outstanding’ ratings, claims fund manager in his bail plea in front-running case

The ED has claimed that it suspects the proceeds of crime to be Rs 300 crore in the case, with Rs 91 crore so far traced to bank accounts of family members of Joshi from various shell companies.

“The applicant’s (Joshi) professional conduct throughout his 14-year-tenure at Axis Asset Management Company, (AMC) has been beyond reproach. He consistently met or exceeded performance targets, earning timely promotions from assistant vice president to senior vice president and regularly receiving “outstanding” ratings in annual appraisals.

His integrity and diligence were recognised through multiple internal awards….and invitations to speak at prominent industry forums,” the bail plea filed through lawyer Manan Sanghai said.

“The conduct of the applicant during his tenure more than sufficiently adduces that Axis Mutual Funds only thrived while the applicant was employed with them as is evidenced by the publicly available documents issued by AMF in respect of its own mutual funds scheme,” it said.

Joshi further said that all trades were routed only through empanelled brokers and he had no discretion over trade selection, timing or price and operated strictly within a tightly regulated framework. “The applicant’s role was operational in nature and served solely to assist between the fund manager’s decision and the said decision’s market execution,” the bail plea said.

In February 2022, the board of directors of the Axis AMC decided to conduct an internal investigation and all employees were asked to hand over their personal and work email ID with passwords, office computer data, office mobile recorded phones, work from home laptops, personal phones, to an external independent investigator. Joshi was placed under temporary suspension on May 3, 2022, and was terminated on May 18, 2022.

Market regulatory authority, Securities and Exchange Board of India (Sebi) had initiated a probe and summoned Joshi. He submitted that he had complied with the summons and his statement was recorded.

Sebi passed an interim order in 2023 stating that Joshi was involved in ‘front-running’, and directions were issued including repayment of alleged illegal gains of Rs 30.56 crore. The bail plea says that the allegations are based on snippets of chat and incomplete trade logs and other data, and is pending finality.

Joshi in his plea has said that he has cooperated with the probe, spanning multiple parallel agencies, including the Sebi, EOW, Income Tax department and ED and that he is not a flight risk. The ED has been asked to file a reply.

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