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The Insurance Regulatory and Development Authority of India (IRDAI) has granted post-facto approval to a transaction executed by BNP Paribas Cardif SA (Cardif) for transfer of 5,07,4,000 equity shares constituting 5.069 per cent of the shareholding of SBI Life Insurance Company Limited.
Following pleadings by the parties in the matter, IRDAI stated that the transaction executed by Cardif for transfer of 5,07,40,000 equity shares constituting 5.069 per cent of the shareholding of SBI Life Insurance Company Ltd, was carried out through the Stock Exchange on March 29, 2019, is violation of section 6A(4)(b)(iii) of the Act read with Reg.3(b) of Transfer Regulations and Listed Insurance Companies Guidelines.
However, in view of the submissions made by Cardif during personal hearing and their request for taking a lenient view, the Authority hereby grants post-facto approval to the said transaction of transfer, it ruled.
Since, compliance with the law was solely their responsibility, Cardif has been advised to exercise due caution to ensure adherence to all legal and regulatory stipulations as applicable in future.
Further, IRDAI stated, “If Cardif feels aggrieved by this Order, an appeal may be preferred to the Securities Appellate Tribunal in terms of the provisions of Section 110 of the Insurance Act, 1938.”
A Show Cause Notice dated June 12, 2019 issued to BNP Paribas Cardif SA (Cardif), the foreign promoter of SBI Life Insurance Company Ltd (hereinafter referred to as SBI Life), by the Authority.
IRDAI sought clarification from SBI Life and Cardif for not seeking prior approval for the said transaction. On examination of the submissions of SBI Life and Cardif, it was noticed that Cardif had sold 5,07,40,000 equity shares constituting 5.069 per cent of SBI Life’s total shareholding without obtaining prior approval of the Authority as required. Hence, Cardif was show caused as to why appropriate action should not be initiated in terms of the relevant provisions of the Insurance Act, 1938; the IRDA Act, 1999, read with the Regulations and Guidelines/Circulars framed thereunder.
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