A Division Bench, comprising Acting Chief Justice Manmohan and Justice Tushar Rao Gedela, noted that the sectoral regulators are already reviewing the matter and directed them to complete their investigation as soon as possible.
![[Rs 5,100 Crore Scam in Axis Bank-Max Life Deal] Delhi High Court Urges RBI and SEBI to Conclude Probe "without delay"](https://i0.wp.com/lawchakra.in/wp-content/uploads/2024/08/image-63-2.png?resize=820%2C461&ssl=1)
NEW DELHI: On Monday(12th Aug), the Delhi High Court dismissed the public interest litigation (PIL) filed by BJP leader Subramanian Swamy, which alleged a Rs 5,100 crore scam in the Axis Bank-Max Life deal.
A Division Bench, comprising Acting Chief Justice Manmohan and Justice Tushar Rao Gedela, noted that the sectoral regulators are already reviewing the matter and directed them to complete their investigation as soon as possible.
“Given that the regulators SEBI and RBI are addressing this controversy, this court disposes of the petition with instructions for them to conclude their investigation promptly and in accordance with the law. Any additional actions should also follow legal procedures,”
the Court ordered.
Swamy’s petition accused Axis Bank of making “undue gains” through transactions involving Max Life Insurance shares. He claimed there was significant fraud in Max Life Insurance and Max Financial Services, enabling Axis Bank and its subsidiaries, including Axis Securities Limited and Axis Capital Limited, to profit illegally from the purchase and sale of Max Life shares in a non-transparent manner.
Swamy argued that these transactions violated directives from the Insurance Regulatory and Development Authority of India (IRDAI) and should be investigated by an expert committee. He emphasized that the issue is of national importance and affects financial security.
Swamy alleged that Axis Bank’s group companies acquired a 12.002% stake in Max Life at prices between Rs 31.51 and Rs 32.12 per share, totaling Rs 736 crores, which he claimed was below the fair market value. This, he argued, resulted in undue profits of approximately Rs 4,000 crores for Axis Bank. He also noted that while IRDAI had imposed a Rs 3 crore penalty on Max Life for misrepresentation, it was minor compared to the alleged total fraud.
![[Rs 5,100 Crore Scam in Axis Bank-Max Life Deal] Delhi High Court Urges RBI and SEBI to Conclude Probe "without delay"](https://i0.wp.com/lawchakra.in/wp-content/uploads/2024/08/image-64-1.png?resize=660%2C450&ssl=1)
According to the petition
“Axis Bank sold its stake of 0.998% shares of Max Life in March 2021… Subsequently, in a very short span of time… Axis Bank Limited and its group entities acquired 12.002% shares from MFSL at price range of INR 31.51 – INR 32.12 per share.”
This transaction, as per Swamy’s allegations, resulted in significant profits for the bank, far beyond fair market values, thereby questioning the legality and transparency of the dealings.
Moreover, the petition criticizes the penalty imposed by IRDAI on Max Life as “negligible” compared to the alleged “fraud” amounting to Rs 4,000 crore, emphasizing a potential disparity in regulatory responses.
Swamy’s plea extends beyond the immediate financial discrepancies, touching upon broader issues of “rampant corruption” within the banking and insurance sectors. He urges the court to facilitate a thorough investigation and establish comprehensive guidelines to prevent similar incidents in the future, reflecting a deep concern for public interest and the integrity of financial institutions.
