Capital market regulator Securities and Exchange Board of India has issued a show cause notice (SCN) to Axis Bank and its subsidiaries in a case related to the purchase of assets from Max Life Insurance.
In a regulatory filing, Axis Bank said the SCN was issued on October 25 via email.
Axis Bank, along with its subsidiaries, Axis Securities Limited and Axis Capital Limited, received the SCN through an email from Sebi, he said.
The SCN is being reviewed and will submit replies to the SCN and Sebi as the said activities have been done with the necessary approval, it said.
Meanwhile, Max Financial Services Limited, the holding company of Max Life Insurance also said that a few directors and a few key executives of the company (in each case, ‘both past and present) have received SCN through an email from Sebi.
Earlier this year, Axis Bank’s board of directors approved a proposal to acquire Max Life shares, increasing Axis’ stake in the insurance company to 19.99 percent from 19.02 percent.
Axis Bank and its two subsidiaries – Axis Capital Ltd and Axis Securities Ltd – have been allowed to collectively own around 20 per cent of Max Life Insurance by the Insurance Regulatory and Development Authority of India (IRDAI).
The stake was acquired as part of a deal that closed in 2021 between Axis Bank and Max Life Insurance.
Last year, Axis Bank entered into a revised agreement with Max Financial Services to acquire an additional 7 percent stake in Max Life Insurance at fair market value using the discounted cash flow method.
The revision of the agreement follows the guidance issued by IRDAI in October 2022.