Mortgage lender HDFC said it has informed insurance regulator Irdai that the proposed merger of Max Life Insurance Company with HDFC Life is structural in nature.
Irdai had expressed reservations about the deal structure in the proposed merger of the two entities. An application was filed on September 21, 2016, by Max Life and HDFC Life, seeking in-principle nod for the amalgamation scheme.
“The structure that we proposed in the transaction is that a non-listed Max Life will first get merged with Max Financial Services which is a listed entity and then the combined entity will be finally merged with HDFC Life,” Keki Mistry, vice-chairman and chief executive of HDFC said.
“Once the merger takes place, we will keep the non-insurance business of Max Financial Services out of the insurance venture. It is in fact a structural change rather than an actual merger,” Mistry said on sidelines of a CII event.
He said HDFC’s lawyers have informed Irdai that the “whole structure is fine as there is no actual merger of the two entities. Now, Irdai says it will seek the advice of the Attorney General on the issue”.
Commenting on the interest rate scenario, he said, “There is scope for rates to fall by 25 basis points or more. But, I can’t tell you by when it will happen.”
On corporate governance, he said independent directors should be entitled to Esop for them to take genuine interest in the corporate governance of the boards they sit on.
On the ongoing issue at Infosys, Mistry said, “Salaries of chief executive is the major issue. What I personally believe is that it shouldn’t be any problem as long as the shareholders are happy with it”.