15 Feb 2024 9:43 AM GMT
By way of a public interest litigation, BJP leader Dr Subramanian Swamy has moved the Delhi High Court against an alleged scam of Rs.5100 crores involving Axis Bank making undue gains from transactions in shares of Max Life Insurance.
The plea was listed today before the Bench of Acting Chief Justice Manmohan and Justice Manmeet Pritam Singh Arora.
Senior Advocate Rajshekhar Rao, representing Swamy, contended that even though the total quantum of alleged undue gains in the instant case exceeds Rs.5,100 crores, no worthwhile action has been taken.
The Court adjourned the hearing of the matter to March 13, asking Swamy's counsel to serve a copy of the petition on the Bank.
In the present case, Swamy claims that Max Life Insurance Co. Ltd. and Max Financial Services Ltd. fraudulently allowed the Max Life shareholder-Axis Bank and its group companies (Axis Securities Limited and Axis Capital Limited) to make undue profits/gains from sale/purchase of equity shares in a non-transparent manner, violating directions of Insurance Regulatory and Development Authority of India (IRDAI).
It is alleged that in the transactions between Max Life and Axis Bank, selling price of shares was way more than the purchase price. As such, the Bank, using its dual relationship as shareholder and corporate agent of Max Life, gained substantially from the transactions. Moreover, the transactions were contrary to the directions issued by IRDAI in 2021.
To quote the petition, "it is evident from the above that, 12.002 % of shareholding in Maxlife is bought by the Axis Bank group companies at Rs. 31.51 / Rs. 32.12 per share at total consideration of 736 Crores, which is evidently below the fair market value."
It is pointed out that IRDAI had imposed a penalty of Rs.3 crores on Max Life for not complying with the directions issued by the Authority, for misrepresenting in order to obtain prior approval of the Authority for transfer of sharers and on account of registering transfer of shares in violation of the directions of the Authority resulting in passing of undue monetary consideration of substantial amounts to Axis Bank.
However, as per Swamy, as against the total undue gains involved, this penalty is negligible and accordingly, the case requires intervention of the Court. It is prayed that the Court constitute an Expert Committee to investigate into the impugned transactions and issue guidelines.
Counsels for petitioner/Swamy: Senior Advocate Rajshekhar Rao, Advocates Satya Sabharwal and Tanya Arora
Counsel for Axis Bank: Senior Advocate Mukul Rohatgi
Case Title: DR. SUBRAMANIAN SWAMY v. UNION OF INDIA AND OTHERS