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Sebi drops disclosure and fraud charges in Max-Axis Bank case
The regulator said the disclosure-related charges could not be sustained because the required violations were not established under the specific rules in force at the time, with disclosure standards having evolved since 2010.
India’s securities regulator Sebi has disposed of proceedings against Max Financial Services Ltd, Max Life Insurance Co. Ltd, and Axis group entities in a case tied to three arrangements involving Axis Bank and group entities.
Sebi examined allegations that the transactions formed part of a scheme to provide benefits to Axis beyond permissible insurance commissions, and that Max Financial Services failed to make adequate and timely disclosures. For the 2020 arrangement, the regulator said the alleged benefit attributed to the Axis group entities was ₹ 3,911.95 crore.
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 when the transactions took place. The regulator added that it had to assess the company under the rules that applied at the time, noting that disclosure standards for listed companies have since evolved.
With the underlying fraud and disclosure allegations not sustained, Sebi also dropped charges against the company’s key managerial personnel and disposed of proceedings against all noticees without issuing directions or imposing any penalty, according to LiveMint Markets.