Axis Bank Faces Allegations of ₹5,100 Crore Scam as BJP Leader Subramanian Swamy Moves Delhi HC

16 Feb 2024 , 10:39 AM

Axis Bank witnessed a more than 2% decline in shares on February 15 following allegations by BJP leader Subramanian Swamy, who moved the Delhi High Court, claiming the bank’s involvement in a ₹5,100-Crore scam.

According to Swamy, Axis Bank unduly benefited through transactions in Max Life Insurance shares, as stated in a post on the X platform on the Bar and Bench website.

Swamy has requested a court investigation by a committee of experts into the alleged fraudulent transactions, asserting a violation of Insurance Regulatory and Development Authority of India (IRDAI) directives.

He argued that Max Life Insurance and Max Financial Services enabled Axis Bank and its group companies (Axis Securities and Axis Capital) to make undue profits from the purchase and sale of Max Life equity shares in a non-transparent manner.

Swamy claimed that Axis Bank group companies acquired a 12.02% shareholding in Max Life Insurance below the fair market value, at ₹31.51- ₹32.12 per share, totaling ₹736 Crores.

Despite IRDAI imposing a ₹3 Crore penalty on Max Life Insurance for misrepresentation, Swamy deemed it negligible compared to the magnitude of the alleged fraud.

A bench consisting of Acting Chief Justice Manmohan and Justice Manmeet Pritam Singh Arora briefly heard the case and adjourned it to March. Senior advocate Mukul Rohatgi, representing Axis Bank, mentioned not receiving a copy of the petition, and the case was adjourned accordingly. Axis Bank shares were trading 2.17% lower at ₹1071.90 on the National Stock Exchange at the time of writing.

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