Daijiworld Media Network - Mumbai

Mumbai, Oct 31: Axis Trustee Services Limited, the trustee for Additional Tier 1 (AT1) bonds issued by Yes Bank, has given the private sector lender three days to reinstate the bonds and complete all necessary corporate actions, warning that it would initiate contempt proceedings before the Supreme Court if the bank fails to comply.

In a communication to Yes Bank, the trustee alleged wilful disobedience of the Supreme Court's October 15, 2026 judgment, which upheld the Bombay High Court's decision to set aside the bank's write-off of AT1 bonds worth ?8,415 crore in March 2020.

Axis Trustee warned that if the bank failed to comply within the stipulated period, it would move the Supreme Court for contempt proceedings against the lender and the directors and officers responsible for implementing the judgment.

In a communication to stock exchanges late on Friday, Yes Bank said it had responded to the trustee, acknowledging the Supreme Court judgment and reiterating its commitment to complying with the ruling and applicable law.

The bank said it was examining the judgment and its implications in detail and would take all steps and measures necessary and permissible under the law.

However, Yes Bank rejected the trustee's allegation of wilful disobedience, describing the characterisation of its conduct as baseless and without merit.

The Supreme Court, on October 15, upheld the Bombay High Court's January 20, 2023 decision quashing the write-off of the AT1 bonds. The apex court ruled that the bank's administrator had acted beyond his authority and contrary to the applicable regulatory framework while ordering the bonds to be written down in March 2020.

Axis Trustee had challenged the decision of the then administrator before the Bombay High Court. In its October 28 communication to Yes Bank, the trustee referred to the High Court judgment and said the decision to write off the bonds had been quashed and set aside.

The trustee maintained that, in view of the Supreme Court's October 15 ruling, Yes Bank was required to restore the bonds to the bondholders with immediate effect.

Following the Supreme Court judgment, Yes Bank had earlier said it was evaluating the ruling, including the options and actions available to it. The latest exchange between the lender and the trustee has brought the implementation of the court's order into focus, with the threat of contempt proceedings hanging over the bank.