Private lender Yes Bank has challenged the Bombay High Court ruling on the write-off of Additional Tier-1 (AT1) bonds worth Rs 8,415 crore, according to a Bloomberg report. The bank has approached the Supreme Court challenging the January 20 order of the Bombay HC. The lender has argued that its administrator, appointed by the Reserve Bank of India (RBI), had the power to fully write down AT1 bonds worth Rs 8,415 crore on March 14, 2020, the report said quoting sources.

The challenge follows an order in which the Bombay High Court set aside the decision to write down these bonds and stated that the bank would have to reinstate them.

The bonds were written off as part of a restructuring plan to rescue Yes Bank in March 2020. The court ruled the decision to write off the bonds and said that it was not a part of the final restructuring scheme and the administrator did not have the authority to make the decision.

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"It appears that administrator exceeded his powers and authority in writing off AT-1 bonds after the bank was reconstructed on March 13, 2020," according to the court order.

Market regular Sebi had imposed a penalty of Rs 2 crore on Yes Bank founder Rana Kapoor in September 2022 for mis-selling AT-1 bonds. It was alleged that the bank and certain officials did not inform investors of the risk involved while selling the AT-1 (Additional Tier-1) bonds in the secondary market. The sale of AT-1 bonds started in 2016 and continued till 2019.

According to Sebi, 1,346 individual investors had invested approximately Rs 679 crore in the AT1 bonds, of which 1,311 were existing customers of Yes Bank and invested approximately Rs 663 crore. Further, 277 customers had existing fixed deposits with Yes Bak and the bank prematurely closed their existing FDs and reinvested an amount to the extent of Rs 80 crore in these AT-1 bonds.

(Edited by : Anshul)

First Published:Feb 13, 2023 11:55 AM IST