New Delhi: Axis Trustee Services Limited (ATSL), the trustee for Yes Bank's Additional Tier-1 (AT-1) bonds, has called upon the private lender to reinstate the written-down bonds and take all necessary corporate actions within three days — failing which it will initiate contempt proceedings before the Supreme Court against the bank and its directors and officers, The Hindu BusinessLine reported, citing the bank's regulatory filing.
Source: The Hindu BusinessLine
In its letter of October 28, the trustee said non-compliance would constitute "wilful disobedience" of the Supreme Court's October 15 judgment, and warned it would be constrained to move the court "without any further notice, entirely at the Bank's risk as to costs and consequences", IANS reported.
Source: IANS via HiIndia
The bank pushes back
Yes Bank, in its exchange filing, said it remains fully committed to acting in accordance with the Supreme Court judgment and applicable law, is cognisant of the matters, and is examining the judgment and its implications in detail. It said it would take all steps that are necessary and permissible under law. The bank rejected the trustee's framing outright: it does not accept the characterisation of its conduct as wilful disobedience and called the assertions in the letter baseless and without merit.
A six-year fight over Rs 8,415 crore
The bonds at the centre of the dispute aggregate Rs 8,415 crore — yaani about Rs 84 billion. They were written down in March 2020 by the bank's then administrator as part of Yes Bank's emergency rescue. Axis Trustee challenged that write-down before the Bombay High Court, which set it aside in January 2023. On October 15, the Supreme Court upheld the High Court, ruling that the administrator had acted outside his authority and beyond the applicable regulatory framework.
This is the second escalation in a week. On October 28, Awaaz Punjab reported that the Yes Bank AT-1 Bondholders' Association had separately written to the RBI, SEBI and the finance ministry seeking time-bound enforcement of the same judgment after a coupon payment was missed. The trustee told the association that its notice seeks reinstatement and activation of the bonds in the bank's books and in its register of debenture holders, covering the two series carrying coupon rates of 9 per cent and 9.50 per cent, according to The Hindu BusinessLine.
What happens next turns on the three-day clock in the trustee's letter: if Yes Bank does not reinstate the bonds or complete the corporate steps, the trustee says it will file for contempt — putting both the institution and the officers responsible for compliance before the Supreme Court.