SEBI cites ₹3,911.95 crore loss to Max Financial Services in fraud case

SEBI examined a series of share transactions between these parties between FY 2009-10 and FY 2021-22 to determine if they violated disclosure requirements and circumvented insurance commission limits.

Who it concerns: Max Financial Services Limited, Max Life Insurance Company Limited, Axis Bank Ltd, Axis Capital Ltd, Axis Securities Ltd, Mr. Analjit Singh, Mr. Mohit Talwar, Mr. Rahul Khosla, Ms. Sujatha Ratnam, Mr. Rahul Ahuja, Mr. Jatin Khanna, Mr. V Krishnan

What SEBI found or ordered

• SEBI investigated transactions between MFSL/MLIC and Axis entities (ABL, ACL, ASL) from FY 2009-10 to FY 2021-22.
• SEBI alleged that MFSL made incomplete or misleading disclosures regarding the bancassurance deal and share buybacks in annual reports and to stock exchanges.
• SEBI alleged that the share transactions were structured to circumvent IRDAI commission limits, resulting in an alleged loss of ₹3,911.95 Crores to MFSL and corresponding benefit to Axis Group entities.
• SEBI alleged violations of the SEBI Act, PFUTP Regulations, and LODR Regulations by MFSL, MLIC, and Axis entities.
• IRDAI had previously levied penalties of ₹2 Crores on Axis Bank and ₹3 Crores on MLIC for related violations.

Also in the document

• The alleged financial impact is significant, with SEBI citing a loss of ₹3,911.95 Crores to MFSL.
• The order involves cross-regulatory issues, noting that IRDAI had already penalized the parties for circumventing insurance commission regulations.
• The transactions involved multiple entities within the Axis group (Axis Bank, Axis Capital, Axis Securities) to acquire stakes in MLIC, allegedly to comply with RBI ownership limits while achieving a larger economic benefit.