Trustee gives Yes Bank 3 days to reinstate ₹8,415 crore AT1 bonds
Axis Trustee Services has warned of contempt action in the Supreme Court if the bank does not restore the written-off bonds.
The 30-second read
- Axis Trustee Services asked Yes Bank to reinstate its ₹8,415 crore AT1 bonds within three days.
- The trustee warned of contempt proceedings against the bank, its directors and officers.
- Yes Bank says it will comply, calls the wilful disobedience charge baseless, and is studying the judgement.
IllustrationAxis Trustee Services Limited, the trustee for Yes Bank's AT1 bonds, has asked the lender to reinstate the bonds, worth ₹8,415 crore. The notice is dated October 28 and was first reported by CNBC-TV18. It gave the bank three days to reinstate the bonds and take all the corporate steps needed.
The trustee also set out a warning. If Yes Bank fails to comply, the trustee may start contempt proceedings before the Supreme Court against the bank, its directors and officers. The bonds were written off in March 2020 during the bank's reconstruction. The Supreme Court has since upheld the Bombay High Court ruling that annulled that write-off.
Yes Bank replied in a filing on October 30, as first reported by CNBC-TV18. The bank said it remains committed to comply. It rejected the charge of wilful disobedience as having no basis and no merit, and said the judgement is under examination.
The trustee also wants the write-off entries reversed at depositories NSDL and CDSL, and the bonds reinstated on BSE and NSE. NDTV Profit reported that the bonds are to be restored in the books and debenture holder records for the original bondholders or their legal successors.
Why it matters
Holders of Yes Bank's AT1 bonds, and the market infrastructure that records them, now face a clear deadline. How the bank acts will show how court rulings on bond write-offs get carried out in India.
The data
| Date | Event |
|---|---|
| March 2020 | Yes Bank wrote off the AT1 bonds |
| October 28 | Trustee notice asks for reinstatement within three days |
| October 30 | Yes Bank files and sends its reply |
