Axis Trustee Services Limited, the trustee for the Additional Tier 1 (AT1) bonds issued by Yes Bank, has asked the private sector lender to reinstate the bonds and take all necessary corporate actions within three days, failing which it said contempt proceedings would be initiated before the Supreme Court.
The trustee alleged wilful disobedience by the lender of the Supreme Court’s October 15 judgment.
In a communication to the exchanges late on Friday evening, Yes Bank said it had responded to the trustee, acknowledging the Supreme Court judgment and reiterating that it was fully committed to acting in accordance with the ruling and applicable law.
“The Bank has informed the Trustee that the Bank is cognizant of the matters and is examining the SC Judgment and its implications in detail. The Bank will take all such steps and measures as are necessary and permissible under applicable law,” Yes Bank said.
“Should the Bank fail to comply with the said judgment as called upon above within the stipulated period, we shall be constrained to initiate proceedings for contempt before the Hon’ble Supreme Court of India, against the Bank and its directors and officers responsible for compliance with the said judgment, without any further notice, entirely at the Bank’s risk as to costs and consequences,” Axis Trustee said in its letter to Yes Bank.
Responding to the letter, Yes Bank rejected the allegation that it had wilfully disobeyed the court.
“The Bank does not accept the characterisation in your Letter of its conduct as wilful disobedience and the assertions in your Letter are baseless and without merit,” it said.
On October 15, the Supreme Court upheld the Bombay High Court’s decision to set aside Yes Bank’s Rs 8,415 crore AT1 bond write-off carried out in March 2020, ruling that the bank’s administrator had acted beyond his authority and contrary to the applicable regulatory framework.
Following the Supreme Court ruling, Yes Bank had said it was continuing to evaluate the judgment, including the options and actions available to it.
Axis Trustee had challenged the decision of the then administrator of Yes Bank to write down the AT1 bonds in March 2020 before the Bombay High Court.
“By its judgment dated 20th January 2023, the Hon’ble Bombay High Court quashed and set aside the impugned decision,” Axis Trustee said in its October 28 communication to Yes Bank.
The trustee further said that, in terms of the Supreme Court judgment dated October 15, 2026, Yes Bank was required to restore the bonds to bondholders with immediate effect.