Former Rajya Sabha MP Subramanian Swamy filed a petition in the Delhi High Court on Thursday, seeking the formation of a Committee comprising experts to investigate alleged fraudulent activities by M/s Max Life Insurance Co. Ltd and M/s Max Financial Services Ltd.
The petition alleges that these companies allowed their shareholder, Axis Bank Ltd, and its group companies, including Axis Securities Ltd and Axis Capital Ltd, to make undue profits from the purchase and sale of equity shares of Max Life in a non-transparent manner.
The plea also asserts that the acts of the concerned respondents amount to a misuse of Axis Bank Limited’s dual relationship as both a shareholder and a corporate agent of Max Life and MFSL. It claims that there has been clear misrepresentation by the respondents before the Insurance Regulatory and Development Authority of India (IRDAI), as well as non-compliance with its directives regarding the transfer of shares.
The bench comprising Justice Manmohan and Justice Manmeet Pritam Singh Arora directed the petitioner to serve copies of the petition to all respondents and scheduled the matter for March 13, 2024.
Senior Advocate Raj Shekhar Rao and Advocates Satya Sabarwal and Tanya Arora represented petitioner Subramanium Swamy, while Senior Advocates Mukul Rohatagi, Rajeev Nayyar, and Neeraj Kishan Kaul appeared for the respondents.
The plea alleges that there was a well-thought-out conspiracy, allowing Axis Bank Limited and its group companies to profit unduly from the purchase and sale of Max Life equity shares, thus misusing their dual relationship with Max Life. It contends that despite previous penalties imposed on Axis Bank Limited for unlawful profiteering, it engaged in similar activities in this transaction, warranting scrutiny.
Swamy’s plea seeks court direction to investigate the matter through a Committee of Experts appointed by the court and to formulate comprehensive guidelines based on the committee’s recommendations to prevent such transactions in the future and regulate arrangements between banks or financial/insurance institutions.
The plea also highlights the widespread corruption in the banking and insurance industries in India and the government’s failure to take appropriate action, which it argues violates Articles 14 and 21 of the Indian Constitution, as the right to life includes the right to live in a corruption-free society governed by the rule of law.
