On February 15, Axis Bank shares declined over 2% in afternoon trading following a report that BJP leader Subramanian Swamy filed a case in the Delhi High Court, accusing the bank of being implicated in a Rs 5,100-crore scam.
According to a post on the Bar and Bench website, Swamy claimed that Axis Bank unfairly benefited through transactions involving shares of Max Life Insurance.
Swamy has requested the court to initiate an investigation by a panel of experts into the transaction.
He stated, “There was clear fraud in Max Life Insurance and Max Financial Services, enabling their shareholder Axis Bank and its group entities Axis Securities and Axis Capital to unjustly benefit from buying and selling Max Life’s equity shares in an opaque manner, thereby violating the mandatory directives of the Insurance Regulatory and Development Authority of India.”
Swamy argued that Axis Bank group companies acquired a 12.02 percent stake in Maxlife Insurance at a price range of Rs 31.51 to Rs 32.12 per share, totaling Rs 736 crores, which was below the fair market value.
He also noted that although IRDAI imposed a Rs 3 crore penalty on Max Life Insurance for misrepresentation, it was insignificant compared to the scale of the alleged fraud.
The case was briefly heard by a bench comprising Acting Chief Justice Manmohan and Justice Manmeet Pritam Singh Arora, who adjourned the hearing to March after senior advocate Mukul Rohatgi, representing Axis Bank, mentioned that he had not received a copy of the petition. Rohatgi explained that while an email was sent to him, the attached petition could not be opened.
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