Axis Bank on February 15 played down the allegations made by politician Subramanian Swamy regarding the Axis-Max Life Insurance transactions, saying that there is no material impact of the allegations and the private sector lender has received all required regulatory approvals.
Axis Bank has obtained all necessary regulatory approvals in connection with these transactions, the bank informed stock exchanges. “We will also take required steps to defend Axis Bank against any unfounded allegations,” the bank said in the statement.
Further, Axis Bank said it believes there is no material impact of the allegations being made against it in connection with the transactions.
“Axis Bank adheres to highest standards of legal and regulatory compliance, and we are committed to take actions in compliance with applicable laws,” it added.
Earlier, BJP leader Subramanian Swamy moved the Delhi High Court, alleging the private bank's involvement in an Rs 5,100-crore scam regarding the Max Life transaction.
Axis Bank shares fell more than 2 percent in afternoon trade on February 15 after Swamy moved the Delhi High Court, alleging the private bank's involvement in an Rs 5,100-crore scam, a report said. It finally closed at Rs 1,074.75, down 2 percent on the NSE.
In an post on X platform, Bar and Bench website said Swamy alleged that Axis Bank made undue gains by way of transactions in shares of Max Life Insurance, and moved court seeking investigation by a committee of experts into the transaction.
"There was a blatant fraud in Max Life Insurance and Max Financial Services allowing their shareholder Axis Bank and its group companies Axis Securities and Axis Capital to make undue profits or gains from the purchase and sale of equity shares of Max Life in non-transparent manner thereby, violating the mandatory directions of the Insurance Regulatory and Development Authority of India," he has said.
Moneycontrol couldn't verify the report independently.
In a statement, Max life insurance said, "We would like to further state that with respect to transactions involving shares of Max Life between MFSL and Axis Bank, SEBI has sought various details/ clarifications from MFSL and Max Life and the requisite details have been submitted by MFSL to SEBI for its consideration, from time to time as advised by SEBI."
"We believe that there is no legal or regulatory anomaly in the transactions and due process of law has been followed. The Company and MFSL shall take all requisite legal recourse to defend the matter before the Hon’ble Court, "it added.
Swamy contented that Axis Bank group companies bought 12.02 percent shareholding in Max Life Insurance for Rs 31.51- Rs 32.12 a share at total consideration of Rs 736 crore, which is below the fair market value.
He further said that though the IRDAI imposed a penalty of Rs 3 crore on Max Life Insurance for misrepresentation but it was negligible compared to the size of the "fraud".
A bench of acting Chief Justice Manmohan and Justice Manmeet Pritam Singh Arora heard the matter briefly and adjourned the case to March after senior advocate Mukul Rohatgi, appearing for Axis Bank, said he had not been served a copy of the petition. A mail was sent to him but the petition attached could not be opened, he said.
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