Subramanian Swamy Alleges Axis Bank Made Rs 5,100-Crore Unjust Gains In Max Life Share Deals
Swamy claims these transactions were conducted in a non-transparent manner, violating IRDAI directives.
Bharatiya Janata Party leader Subramanian Swamy has approached the Delhi High Court, alleging financial irregularity of approximately Rs 5,100 crore involving Axis Bank Ltd. He contended that the bank unjustly profited through transactions involving shares of Max Life Insurance Co.
The case was briefly heard by a bench comprising Acting Chief Justice Manmohan and Justice Manmeet Pritam Singh Arora.
However, the court adjourned the matter to March 13 as Senior Advocate Mukul Rohatgi, representing Axis Bank, informed the court that he had not received a prior copy of the petition.
The petition urges the formation of a committee consisting of experts in the public interest to investigate alleged fraudulent activities by Max Life Insurance and Max Financial Services Ltd.
The petition alleges that Axis Bank and its group entities made undue profits from the purchase and sale of equity shares of Max Life. Swamy claims that these transactions were conducted in a non-transparent manner, violating the directives of the Insurance Regulatory and Development Authority of India.
The petition raises concerns about the management of banks being handed over to non-banking professionals without banking experience, attempting to acquire shareholding through unfair and non-transparent means.
Axis Bank has clarified in an exchange filing that there is no material impact of the allegations made regarding the Rs 5,100 crore unjust gains in Max Life Insurance share deals.
The private lender said that it has obtained all necessary regulatory approval in connection with these transactions involving shares of Max Life. "We will also take required steps to defend Axis Bank against any unfounded allegations," the bank said.
In 2021, Axis Bank and other group entities had purchased 12.02% stake in Max Life Insurance. In August last year, the bank's board had approved a further investment of Rs 1,612 crore in the life insurer to purchase 7% more stake. Insurance Regulatory & Development Authority of India gave its nod for this additional stake buy in February.
This is the second such attempt by Axis Bank and group entities to buy additional stake in Max Life.
In October 2022, IRDAI had imposed a Rs 3 crore fine on Max Life and a Rs 2 crore fine on Axis Bank. In case of Max Life, the insurance regulator had said that the company had misrepresented facts to avail approval on the transaction, while Axis Bank was fined for flouting directions and making undue gains in the deal.
