Max Financial Services, which operates as a holding company for Max Life Insurance Company, on Thursday said that Securities and Exchange Board of India (SEBI) had sought various details/clarifications from the company. Replying to CNBC-TV18's report of likely action by the market regulator with reference to Max-Axis deal, the company said that details have been submitted to SEBI, but they have not heard anything as yet.

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Earlier, CNBC-TV18 reported that SEBI is currently in an advanced phase of inquiry into the Axis Bank- Max Life Insurance deal. It was also understood that the market regulator is also scrutinising the differences in valuation observed during the transactions.

During the initial phase of the transaction, Axis Bank acquired around 19 percent ownership in Max Life Insurance, with the first tranche representing approximately 12.99 percent. Both Axis Bank and Max Life Insurance faced penalties from the Insurance Regulatory and Development Authority of India (IRDAI) for two primary reasons. Firstly, a disparity in the pricing of the deal, and secondly, allegations of unjust gains made by the involved entities from the transaction.

Sources earlier said that SEBI is concurrently conducting an investigation into this matter. In fact, SEBI has progressed significantly in its examination of this specific transaction. It is anticipated that SEBI's regulatory measures will be announced in the near future.

The charges under SEBI's scrutiny include potential harm to public shareholders due to the perceived undervaluation in the pricing of the initial transaction. SEBI suspects that the transaction might have resulted in a loss of shareholder value. Additionally, the investigation covers the differences or discrepancies in the valuation itself.

Also Read | Axis Bank to acquire remaining 7% stake in Max Life Insurance

(Edited by : Anshul)