RBI, Sebi get more time in Yes Bank’s AT1 bonds case

Published on Mar 27, 2021 01:18 AM IST

The bondholders, who had approached the court in February under the banner of the AT1 Bondholders Association, claim that the sale of bonds was illegal and have asked for Yes Bank to be directed to deposit ₹160 crore in court, pending a decision in the case.

Yes Bank’s AT1 bonds worth <span class='webrupee'>₹</span>8,415 crore were written down in full in March last year.(Bloomberg file photo)
Yes Bank’s AT1 bonds worth 8,415 crore were written down in full in March last year.(Bloomberg file photo)
ByShayan Ghosh, Neil Borate, Mumbai

The Bombay high court has granted time to the Reserve Bank of India (RBI) and Securities and Exchange Board of India (Sebi) to file responses in a petition filed by individual holders of Yes Bank additional tier 1 (AT1) bonds.

The bondholders, who had approached the court in February under the banner of the AT1 Bondholders Association, claim that the sale of bonds was illegal and have asked for Yes Bank to be directed to deposit 160 crore in court, pending a decision in the case.

The Supreme Court had in October 2020 directed the association to approach the high court. The petitioners in this case had invested about 160 crore in Yes Bank’s AT1 bonds.

“Some of the respondents including Sebi and RBI sought time to file a reply to our interim relief application. The court has allowed them to file the same and listed the matter next on 26 April,” said Srijan Sinha, an advocate who appeared on behalf of the association. The petition named 16 respondents including Sebi, RBI, the Union of India, Yes Bank, Yes Securities (India) and Axis Trustee Services, among others.

On March 13, 2020, the government had approved a rescue plan for Yes Bank, backed by the State Bank of India (SBI). Domestic investors— SBI, Housing Development Finance Corp, ICICI Bank, Kotak Mahindra Bank, Bandhan Bank, Federal Bank and IDFC First bank—had invested 10,000 crore in Yes Bank. However, Yes Bank’s AT1 bonds worth 8,415 crore were written down in full in March last year.

The petitioners said they are victims of an illegal sale of perpetual subordinated unsecured non-convertible ATl bonds made by the private respondents, in collusion with Yes Bank and other intermediaries.

“Such an illegal sale of such AT1 bonds was perpetuated under the eyes of respondent number one (RBI) and respondent number three (Sebi).

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