Chennai, Sep 1 : Indian insurance regulator has referred the curious case of Axis Bank and two other group companies buying shares of Max Life Insurance Company Ltd at a very low rate from shareholders/promoters of the insurer and selling them back at a very high price in a matter of few days, to the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI), said a senior official. Last October, the Insurance Regulatory and Development Authority of India (IRDAI) had penalised Axis Bank Rs 2 crore for the share transactions which was done mainly to get excess remuneration as corporate agent of Max Life than permissible under the rules. 'IRDAI had in the past imposed penalty and had shared those details with both SEBI and RBI. As independent regulators they are free to examine any aspects that may fall within their purview,' a senior official in IRDAI told IANS preferring anonymity. In a regulatory filing on August 31, 2023, Max Financial Services Ltd (a parent of Max Life) said: 'SEBI had sought various details/clarifications from the Company. The requisite details have been submitted by the Company to SEBI for its consideration. The Company has not heard anything from SEBI in this regard.' 'In this regard, we would like to further state that the Company had taken appropriate approvals from its shareholders in 2020 (with 99.99% affirmative voting from the shareholders) for cementing the long-term strategic partnership with Axis Bank in respect of its life insurance subsidiary, viz., Max Life which included certain transfer of shares of Max Life and that all adequate disclosures have been made by the Company,' the Max Financial added. According to IRDAI, on 29.2.2016, Axis Bank bought about 9.57 crore shares of the Max Life from Max Financial and Mitsui Sumitomo Insurance Company Ltd ' the two promoters of the life insurer- for Rs.10.79 per share for about Rs.103 crore. Later on 22.3.2018, 18.12.2018 and 19.12.2018, Max Financial and Mitsui Sumitomo bought back about 5.73 crore shares for Rs.108.20, Rs.115 and Rs.134 per share respectively. On March 15 and 16of 2021, Max Financial and Mitsui Sumitomo bought about 1.91 crore shares of Max Life for Rs.166 per share from Axis Bank. Interestingly, 10 days later, on 26.3.2021, two group companies of Axis Bank - Axis Capital and Axis Securities- bought about 5.74 crore shares of Max Life (Axis Capital 3.83 crore, Axis Securities 1.91 crore) from Max Financial for just Rs.31.51 per share. On 6.4.2021, Axis Bank bought 17.27 crore shares of Max Life from Max Financial for Rs.32.12 per share. The issue blew up when Max Life had applied to IRDAI seeking its approval for transfer of about 9.91 crore shares held by Mitsui Sumitomo to Max Financial. Following the correspondence with Max Life, IRDAI observed that Max Financial and Mitsui Sumitomo had a series of share sale/buy transactions with its corporate agent Axis Bank. The IRDAI said shares of the life insurer were transferred to Axis Bank at a value which is substantially lower than the fair market value and buying it back at a substantially higher price. IRDAI officials told IANS that this is an ingenious way of remunerating a corporate agent in excess of what is permissible under the regulations. (Venkatachari Jagannathan can be reached atv.jagannathan@ians.in) /IANS