Conflict Of Interest? Dr Subramanian Swamy Alleges SEBI Chairperson's Past Ties With Max Healthcare Affecting Axis Bank Probe

The Delhi High Court has ordered SEBI and the Reserve Bank of India (RBI) to expedite their investigation into alleged fraudulent activities by Axis Bank Limited in the sale and purchase of shares of Max Life Insurance Company Limited. The court dismissed a plea by former Rajya Sabha member Subramanian Swamy to constitute a committee to probe the allegations.

Swamy had alleged that Max Financial Services and Mitsui Sumitomo International had transferred shares of Max Life to Axis Bank at a lower market value, which were later purchased at a much higher price. "We had filed a PIL in the Delhi High Court alleging that Axis Bank had wrongly purchased shares of Max Health Insurance Company at a lower price and later sold them at a higher price, making a profit, which is against banking rules and illegal," Swamy said.

The IRDA had already imposed a fine of ₹2 crore on Axis Bank and ₹3 crore on Max Life, and the matter was referred to RBI and SEBI for further action. SEBI informed the court that it had initiated a preliminary investigation into the matter and had forwarded Swamy's letter to RBI for further action.

Swamy had also filed an affidavit alleging a conflict of interest by the SEBI chairman, who had previously served as an additional director and director of Max Healthcare Institute Limited. "The SEBI chairman had a professional relationship with the Max group in the past, which raises questions about her ability to take an impartial decision in this case," Swamy said.

However, the court observed that Swamy had not made the SEBI chairman a party to the case. "Even if the SEBI chairman had a past professional relationship with the Max group, it should not stop SEBI from taking action according to rules," the court said. "If the final decision is influenced by the SEBI chairman's alleged past professional relationships, Swamy can approach the court again."

Swamy warned that if SEBI fails to take action, he will approach the court again. "Axis Bank's main business is to give loans and pay interest on deposits. But it is engaged in wrong practices to make money. Such banks should be shut down," Swamy said. "The government should also recover the money made through such wrong practices."

The court also noted that if SEBI fails to take action, Swamy can file a criminal case. "We have told the court that if SEBI does not take action, we will file a criminal case," Swamy said. The court dismissed a plea by former Rajya Sabha member Subramanian Swamy to constitute a committee to probe the allegations.