Exclusive: ZeeBiz report hits bull's eye again! IRDAI orders changes in Axis Bank-Max Financial deal
Once again, a Zee Business breaking news has been validated - this time by IRDAI. The news was related to the deal between Axis Bank and Max Financial Services. The Insurance Regulatory and Development Authority of India (IRDAI) has asked some serious questions in relation to the deal with the companies. Zee Business’ Anurag Shah has a detailed report
Once again, a Zee Business breaking news has been validated - this time by IRDAI. The news was related to the deal between Axis Bank and Max Financial Services. The Insurance Regulatory and Development Authority of India (IRDAI) has asked some serious questions in relation to the deal with the companies. Zee Business’ Anurag Shah has a detailed report.
Shah told Managing Editor Anil Singhvi that the insurance regulator had asked certain questions from the companies with regards to the deal, and this news was earlier reported by Zee Business channel.
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#ZBizExclusive | एक बार फिर ज़ी बिज़नेस की खबर पर लगी मुहर... IRDAI ने एक्सिस बैंक और मैक्स फाइनेंशियल डील के स्ट्रक्चर में बदलाव का दिया आदेश#AxisBank #MaxFinancial #IRDAI @AnilSinghvi_ @anuragshah710 pic.twitter.com/y0T741MFdf
— Zee Business (@ZeeBusiness) July 24, 2020
On Thursday, the companies in their filing to the exchanges admitted that certain questions were raised by the regulator, Shah said. The companies are now reworking the agreement.
IRDAI had asked for the removal of a clause related to Value Creation Options which Axis Bank had put in the agreement. The value creation option said that if the company did not see value getting created in 63 months, it will sell the shares at a price of Rs 294 per share.
The regulator had indicated that the clause must go if the deal has to go through, Shah said.
Both the companies have agreed to remove this clause from the agreement, he further said. This development is important for Max Financial Services, Shah said.
This means that even if the value is not created for Axis Bank, it will still remain in the company and would not be able to exit, he said.
IRDAI has sought further clarifications on several other issues. The whole deal is now being reworked, he said.
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“Based on correspondence from IRDAI received by the Company, Axis Bank and the Company have agreed to make some changes to the Value Creation Options and factor in some alternate mechanisms subject to regulatory approvals and as maybe permitted under applicable law,” Axis Bank said in the exchange filing on Thursday.
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