Axis Trustee Demands Restoration Of ₹8,415 Crore Yes Bank AT1 Bonds Within 3 Days, Warns Of Contempt Proceedings

Axis Trustee Services Limited has directed Yes Bank to restore its written-off Additional Tier 1 (AT1) bonds within three days, warning that failure to comply could trigger contempt proceedings before the Supreme Court.

The trustee, representing AT1 bondholders, alleged that the private sector lender had wilfully disobeyed the Supreme Court's Oct 15 judgment concerning the Rs 8,415 crore bond write-off.

In a late-Friday stock exchange filing, Yes Bank acknowledged receiving the communication but rejected allegations of deliberate non-compliance.

Axis Trustee asked the lender to reinstate the bonds and complete the necessary corporate formalities within the stipulated period.

It warned that failure to act could result in contempt proceedings against the bank and its directors and officers responsible for implementing the judgment.

The trustee maintained that the Supreme Court's ruling required immediate restoration of the bonds to their holders.

Yes Bank, however, disputed the allegation of wilful disobedience, describing the trustee's assertions as baseless and without merit.

The lender said it was examining the judgment and its implications before determining the steps permissible under applicable law.

It reiterated its commitment to complying with the court's directions.

On Oct 15, the Supreme Court upheld the Bombay High Court's decision invalidating Yes Bank's March 2020 write-off of AT1 bonds worth Rs8,415 crore.

The apex court held that the bank's administrator had exceeded his authority and acted contrary to the applicable regulatory framework.

Axis Trustee had originally challenged the administrator's decision before the Bombay High Court.

On Jan 20, 2023, the High Court quashed the write-off.

Following the Supreme Court judgment, Yes Bank stated that it was evaluating the ruling and considering the options available to it.

In its Oct 28 communication, Axis Trustee insisted that the lender was required to restore the bonds immediately.

The dispute now centres on implementing the judgment, with the trustee demanding prompt action and Yes Bank maintaining that it must assess the legal requirements before proceeding.