Capital markets regulator Securities and Exchange Board of India (Sebi) on Friday barred former Axis Mutual Fund chief dealer Viresh Joshi and 20 other entities from the securities market for up to seven years after finding them guilty in the Rs 30.55-crore front-running scheme involving trades executed by Axis Mutual Fund between September 2021 and March 2022.
In its 146-page final order, Sebi held that Joshi, who was serving as chief dealer at Axis MF, passed on non-public information relating to impending trades of the fund house to Dubai-based co-conspirator Prijesh Kurani. Kurani allegedly used multiple conduit or mule accounts to place trades ahead of Axis MF’s transactions and square off positions for profit.
The regulator said Sumit Desai, Pranav Vora and Vaibhav Pandya assisted in arranging trading accounts and facilitating the execution of the scheme. According to SEBI, the front-running trades followed buy-buy-sell or sell-sell-buy patterns across several accounts.
SEBI had earlier impounded Rs 30.55 crore as prima facie unlawful gains generated through the alleged activity. The largest chunk of the gains--Rs 14.07 crore--was attributed to Visa Capital Partners, followed by Nishil Surendra Marfatia (Rs 3.08 crore) and Olga Trading Pvt Ltd (Rs 3.01 crore).
The regulator noted that the entire impounded amount has since been deposited. However, it observed that the conduct of the noticees posed a significant risk to market integrity and warranted market access restrictions, particularly in the case of the Kurani group, which has figured in other SEBI proceedings as well.
Under the final order, Viresh Joshi, Prijesh Kurani and five members of the Kurani group have been barred from accessing the securities market for seven years. Sumit Desai and Pranav Vora have been debarred for five years, while the remaining entities, including Visa Capital Partners and Olga Trading Pvt Ltd, have been restrained for three years. SEBI clarified that the period already undergone under the interim order issued in February 2023 will be set off against the debarment period.
The case originated from alerts generated by Sebi’s surveillance system, which flagged suspicious trading patterns linked to Axis Mutual Fund. The regulator’s investigation concluded that Joshi had access to confidential information on stock names, quantities and timing of Axis MF orders in his capacity as chief dealer and used that information to facilitate front-running activity.
