Hydearabad:
The insurance regulator, IRDAI has launched an investigation internally agianst Marsh India Insurance Brokers, even as it is waiting to appeal against SAT(Securities Appellate Tribunal) judgment that had severely reprimanded the regulator’s earlier decision on Marsh India, alleged to have committed financial irregularities to gain business contract illegally..
The Hyderabad insurance regulator had launched the investigation under its newly appointed member, distribution, Sujoy Banerjee, against Marsh India Insurance Brokers.
SAT had directed it to reprobe against Marsh India Insurance Brokers, alleged to have offered kick backs to shift business-arranging covers for UK based Offshore drilling firm Jagson International- from another UK based broker Atkins Special Risks.
“SAT, in it's order has expressed suspicion that dubious transaction has taken place and documentary proof is believed to be there to support this perception. The outcome of the investigation was that Irdai didn't find any evidence of dubious transaction. We are doing tbhis investigation for our own internal consupmption and we haven’t given any clean chit to anybody in the matter as we are waiting to appeal in the Supreme court on the issue of passing of a derogatory remark against a senior Irdai official.We feels it is absolutely unwarranted as no opportunity was given to the Irdai official by SAT to clarify his position,'' said IRDAI
IRDAI has decided to appeal to the SC against SAT order which apart from asking IRDAI to reprobe the kickback allegation Marsh and pass a fresh order, had said “the impugned order passed by Mr. P.J. Joseph (non-life) virtually amounts to aiding and abetting corruption in the insurance business by the regulator which cannot be tolerated.’’
The insurance regulator has roped in senior counsel Arvind Datar to represent itself on the SAT matter in the SC
Describing the SAT order as “biased and prejudiced and against due process of law’’ IRDAI would appeal to the SC to set aside the SAT comments on Joseph and IRDA.
Earlier, Atkins Special Risks, in its complaint with SAT, had alleged though it complained to the IRDAI about the alleged misdeeds by the Marsh India Insurance Brokers, which was supposed to have bribed its way to shift a business contract of Jagson International, a client of Atkins for over a decade, the insurance regulator was not ready investigate and take action against culprits.
Disposing an appeal filed by Atkins Special Risks, the SAT bench comprising presiding officer Justice J.P. Devadhar and member Dr. C.K.G. Nair had set aside an order passed by IRDAI Member (Non-Life) P.J. Joseph and directed the regulator to conduct a probe by a “competent officer” and pass a fresh order.
Atkins Special Risks in its complain to SAT had said it had filed a complaint with IRDAi in August 2015 on the issue, but as no action was taken, it had filed a writ petition in the Telangana and Andhra Pradesh High Court, which disposed of the case on September 2017 by directing IRDAI to consider the complaint filed by them.
In that complaint, specific dates on which Jagdish Gupta, Chairman of Jagson had sent his emails demanding kickbacks were set out. It was also alleged that during the telephonic conversation, Gupta has told the Atkins that Marsh had agreed to pay him US$ 4,00,000 in order to obtain Jagson’s business.
However, after hearing the appellant, Joseph, took a decision to dispose of the complaint by stating that the appellant has not submitted any documentary proof, material information or evidence in support of its contention.
The complaint argued that in view of evidence gathered, as also the third party evidence regarding kickbacks, it is apparent that Section 41(1) of the Indian Insurance Act, 1938 and Regulation 37(1) of the Insurance Regulatory and Development Authority (Insurance Brokers) Regulations, 2013 have been violated.
The appellate tribunal, however, said that the said judgment made it clear that the SAT has not expressed any opinion on the merit of the complaint filed by appellant.
The SAT is a statutory body for hearing and dispose of appeals against orders passed by the capital market regulator Sebi, the insurance regulator IRDAI and pension fund regulator, PFRDA and any judgment of the Appellate body can be challenged only in the highest court of law Supreme Court.
Earkier Jagson International today denied all allegations in a broker transfer case. Marsh India also earlier had said, “we wish to clarify that SAT has not passed any order against Marsh India. Further, the tribunal has categorically stated, ‘We make it clear that we have not expressed any opinion on the merits of the complaint filed by the appellant.’
In a statement, Jagson International had said that it strongly denied every allegation appearing in media reports.