In a case involving the purchase and sale of shares by Axis Bank and its group companies, the regulator Irdai has imposed a penalty of Rs 3 crore on Max Life Insurance Company.
Axis Bank, a corporate agent of the insurer, has been fined Rs 2 crore by the Insurance Regulatory and Development Authority of India (IRDAI).
It was found that Max Life Insurance violated Irdai’s directions, misrepresented to obtain approval, and violated share transfer instructions.
Irdai stated in the decision that “it is obvious that Axis Bank had sold its shareholding of 0.998% shares of Max Life to MFSL and MSI in March 2021 at Rs 166 per share. Then, between March and April 2021, Axis Bank and its Group businesses purchased 12.002% of MFSL’s shares for a price that ranged between Rs 31.51 and Rs 32.12 per share. The Authority’s directives are not being followed in this situation (Irdai).
MFSL stands for Max Financial Service Ltd., while MSI stands for Mitsui Sumitomo International.
In accordance with the order on the Axis Bank matter, the lender has been fined Rs 2 crore for making undue gains through the trading of Max Life Insurance shares and violating other rules.
The combination of Axis Bank and its two subsidiaries, Axis Capital and Axis Securities, owns 12.99 percent of Max Life Insurance following the approval of the deal in April last year.
According to the agreement, Axis entities may also acquire a stake in Max Life of up to seven percent, in one or more tranches, subject to regulatory approvals.
