On Wednesday, Axis Bank presented its opposition before the Delhi High Court regarding BJP leader Subramanian Swamy’s public interest litigation (PIL), which seeks an investigation into an alleged fraud committed by the bank in order to gain “undue profits” through the sale and purchase of shares in Max Life Insurance.
The Delhi High Court Today (February 13) was approached to address a Public Interest Litigation (PIL) filed by BJP leader Subramanian Swamy. The litigation seeks an investigation into alleged fraudulent activities by Axis Bank, purportedly aimed at generating “undue profits” through intricate share transactions with Max Life Insurance.
Also Read- Patna Civil Court Tragedy: Lawyer Killed, 2 Others Injured In Transformer Explosion (lawchakra.in)
During the court proceedings on Wednesday, Axis Bank’s representation vehemently contested the maintainability of Swamy’s PIL. The bank’s senior counsel, alongside representatives for Max Life, argued before Acting Chief Justice Manmohan that the issue at hand was essentially a commercial transaction between private entities, thus questioning the PIL’s relevance in this context.
Senior advocate Mukul Rohatgi, representing Axis Bank and its affiliates, emphasized that the PIL failed to specify the “class” of individuals it aimed to protect, arguing that aggrieved shareholders had the capacity to approach the court independently. Echoing this sentiment, Senior Advocate Neeraj Kishan Kaul, representing the Max entities, highlighted that the transaction in question was a commercial agreement already scrutinized by the sector’s regulator.
The counsel for the insurance sector regulator, IRDAI, informed the court that a “possible penalty” had been levied concerning the disputed transaction, indicating regulatory action had been taken.
However, representing the petitioner, Senior Advocate Rajsekhar Rao argued that the matter “warrants a larger look,” suggesting the implications of the case extended beyond the immediate parties involved.
The bench, which also includes Justice Manmeet P S Arora, has scheduled the next hearing for April 3, indicating the continuation of legal scrutiny into the matter.
Dr. Swamy, in his PIL, has called for the establishment of an expert committee to delve into the allegations, highlighting concerns over the integrity of private sector banks. The petition details how Axis Bank allegedly reaped undue profits of approximately Rs 4,000 crore through non-transparent transactions involving Max Life’s equity shares.
Also Read- Senthil Balaji’s Remand In ‘Money Laundering Case’ Extended -Till March 18 (lawchakra.in)
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, underscoring 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.
As the case unfolds, it promises to shed light on the complexities of financial regulations, corporate governance, and the role of judiciary in maintaining transparency and accountability in the banking and insurance industries. The outcome could have significant implications for the regulatory landscape and corporate practices in India’s financial sector.
Also Read- Former BSP MLA Mukhtar Ansari Convicted In 34-year-Old Case: Special MP/MLA Court (lawchakra.in)
