Axis Bank Limited finds itself under scrutiny following a Public Interest Litigation (PIL) filed by senior BJP leader Subramanian Swamy in the Delhi High Court. The PIL alleges a massive fraud of ₹4,000 crores concerning the sale and purchase of shares of Max Life Insurance Company Limited.
Axis Bank has issued clarifications on the plea filed by Swamy, emphasising that they have obtained all necessary regulatory approvals for the transactions related to the sale/purchase of shares of Max Life Insurance. The bank expressed its commitment to defending against any unfounded allegations, asserting that there is no material impact on the bank due to the accusations.
High Court Intervention
Subramanian Swamy has urged the High Court to initiate an investigation into Axis Bank’s alleged fraudulent activities aimed at making “undue profits” through the sale and purchase of shares in Max Life Insurance. The bench of Acting Chief Justice Manmohan and Justice Manmeet PS Arora has listed the PIL for further hearing on March 13 after Axis Bank’s senior counsel mentioned they had not received a copy of the plea.
Swamy, in his petition, calls for the court to establish a committee of experts to investigate the matter, arguing that the “rot” in private sector banks needs to be exposed. Swamy alleges that Axis Bank unlawfully gained ₹4,000 crores through the non-transparent and regulatory violation-ridden sale and purchase of Max Life equity shares.
About the matter
The petition details the transactions, highlighting that Axis Bank initially sold its 0.998% stake in Max Life to MFSL and Mitsui Sumitomo International in March 2021. However, within a short period, Axis Bank and its group entities acquired 12.002% shares from MFSL at a price range of ₹31.51 to ₹32.12 per share in March-April 2021. Swamy claims that this acquisition was below the fair market value, resulting in an illicit gain of approximately ₹4,000 crores.
The petition also notes that despite the Insurance Regulatory and Development Authority of India (IRDAI) imposing a penalty of ₹3 crores on Max Life, this amount is deemed “negligible” in comparison to Axis Bank’s alleged “fraud.”
Swamy requests the court to intervene by directing an investigation through a Committee of Experts and formulating comprehensive guidelines to prevent such acts in the future and regulate transactions between banks and financial/insurance institutions.
The petition emphasises the need to address “rampant corruption” in the banking and insurance industry, pointing out the executive’s “manifest unwillingness” to take necessary actions, which it claims gravely impairs the people’s right to live in a corruption-free society.
