Image Source : FILE PHOTO Representational image
Private sector lender Yes Bank has reportedly approached the Supreme Court to challenge the Bombay High Court ruling on the write-off of Additional Tier-1 (AT-1) bonds.
The AT-1 bonds worth Rs 8,400 crore were written off in March 2020 as part of a restructuring plan to rescue the bank and to bring relief to investors.
The commercial bank has now challenged Bombay High Court’s January 20 order.
On the other hand equity holders did not face a similar write-down, however, 75% of their shares were subject to a lock-in for three years.
As a part of a restructuring scheme to save the lender from collapse led by State Bank of India, The Reserve Bank of India (RBI) had directed the Yes Bank administrator to write off these bonds.
In its defense, Yes Bank has argued that its administrator, who was appointed by the central bank, had the power to fully write down AT-1 bonds worth Rs 8,415 crore on 14 March 2020.
The Bombay HC last month said that there were procedural lapses in the decision by Yes Bank to write down the bonds. It did not go into the merits of the nature of these bonds.
However, the court in its decision offered relief to bondholders with exposure of Rs 8,450 crore to these bonds.
The court ruled that the administrator appointed by the RBI did not have the power to take the decision to write off the bonds. The court said it was not a part of the final restructuring scheme.
“It appears that the administrator exceeded his powers and authority in writing off AT-1 bonds after the bank was reconstructed on March 13,” the court ruled.
ALSO READ | Zomato exits from 225 cities but CEO Deepinder Goyal says will hire around 800 people
ALSO READ | Retail inflation rises to 3-month high of 6.52 per cent in January, says Govt data
Latest Business News
Source link
