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Informist, Tuesday, Oct. 29, 2024

 

NEW DELHI – Max Financial Services Ltd on Tuesday denied allegations made in a showcause notice by the Securities and Exchange Board of India, relating to the purchase of shares of its subsidiary Max Life Insurance by Axis Bank group companies, saying it will file a detailed response on the same "in due course".

 

"The Company categorically denies these allegations and asserts that all the transactions with the Axis Bank group were undertaken in a bona fide manner and in full compliance with applicable laws and regulations and with requisite corporate and regulatory approvals. The Company adheres to highest standards of corporate governance, transparency and compliance. The Company will be filing a detailed response with SEBI in respect of the aforesaid SCN (show cause notice) in due course," Max Financial Services told exchanges.

 

The company's denial came after media reports on the contents of the showcause notice, sent by SEBI on Oct. 25, which Max Financial said it was currently reviewing and "evaluating its options". In the exchange filing Tuesday, Max Financial said the allegations in the notice relate to inadequate disclosures pertaining to the purchase of shares of Max Life Insurance by Axis Bank, Axis Securities, and Axis Capital between 2011 and 2021, with the transaction resulting in additional benefits to the Axis Bank group companies over and above what was permitted for corporate agents to ensure the privileged partner status accorded to Max Life by Axis Bank group.

 

Axis Bank had said on Saturday that it, Axis Securities, and Axis Capital, had also received a similar showcause notice from SEBI on Oct. 25 and that it would be filing a response "as the said transactions were undertaken with requisite regulatory approvals".

 

The issuance of the notices came after the Delhi High Court asked SEBI and the Reserve Bank of India in August to expedite their probe into the alleged fraud by Max Financial and Max Life Insurance, with politician Subramanian Swamy claiming Axis Bank made INR 40 billion of undue profits from a non-transparent purchase of shares. Shares of Max Financial ended 0.5% higher on Tuesday at INR 1,272.60 on the National Stock Exchange, while those of Axis Bank closed at INR 1,186.85, 1.3% higher from Monday.  End

 

Reported by Siddharth Upasani

Edited by Akul Nishant Akhoury

 

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