Mumbai: The Securities and Exchange Board of India (Sebi) has disposed of proceedings against Max Financial Services Ltd (MFSL), Max Life Insurance Co. Ltd (MLIC) and Axis group entities, noting that allegations of fraud and inadequate disclosures were not established.
The order relates to three arrangements between MFSL, MLIC, and Axis Bank and its group entities in 2010, 2015 and 2020. Sebi had examined whether the transactions formed part of a scheme to provide benefits to Axis beyond permissible insurance commissions, and whether MFSL had failed to make adequate and timely disclosures.
The regulator had alleged that shares were issued or sold to Axis at par or at discounted valuations, and bought back later at higher prices, resulting in undue benefits to Axis entities. In relation to the 2020 arrangement, the allegations put the alleged benefit to Axis group entities at ₹3,911.95 crore.
Sebi also examined whether MFSL had failed to disclose key details of the transactions. These included whether the company had adequately disclosed details of the corporate agency arrangement, the issue of shares to Axis Bank, buyback arrangements and other terms of the transactions.
However, in its final order, Sebi said the disclosure-related charges could not be sustained because there was no material establishing violations of the specific provisions applicable at the time. The regulator said that disclosure standards for listed companies have evolved since 2010. It also said the company had to be assessed under the rules that applied at the time of the transactions.
The order itself notes that there was no allegation of market manipulation through artificial inflation of price, volume or otherwise interfering with market integrity.
Sebi concluded that the allegation of a fraudulent scheme to defraud MFSL shareholders was not established. With the underlying disclosure and fraud allegations not sustained, the charges against the company’s key managerial personnel were also dropped.
The regulator also disposed of the proceedings against all noticees without issuing any directions or imposing any penalty.
Apoorva is a Mumbai-based journalist at Mint who covers the Securities and Exchange Board of India (SEBI), tracking the pulse of India’s capital markets, regulatory developments and the people who operate within them. She holds a postgraduate diploma in business and financial journalism from the Asian College of Journalism, where she developed a strong foundation in markets, companies, and economic policy. She began her journalism journey with an internship at Bloomberg, where she worked across beats such as real estate, infrastructure, capital markets, and deals, which helped her understanding of business and finance.<br><br>She is guided by the belief that everything in this world can be explained in simple and fewer words, and that idea shapes how she approaches her writing. She aims to cut through complexity and present nuanced regulatory and financial developments in a way that is both accessible and meaningful to readers.<br><br>When she is not tracking market chatter, Apoorva can usually be found deep into a fiction novel or out on a long run. She is also a trained classical dancer in Bharatanatyam, Mohiniyattam, and Kathakali.
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