YES
Bank has approached the Supreme Court to challenge the Bombay
High Court's January 20 order quashing the write-off of the additional tier-1
(AT-1) bonds, a report by BQ Prime said
quoting two people aware of the developments. The bank has said that its
administrator had the power to write off these bonds worth Rs 8,415 crore.
On January 20, the Bombay High Court quashed
YES Bank's decision to write off AT-1 bonds in March 2020.
"The final scheme sanctioned by the Central
government did not contain the clause or provision for writing down AT-1
bonds," the court had said.
The court had further held when the RBI prepared the
draft scheme for the reconstitution of the bank, it had invited suggestions and
objections, and it appears the petitioners had raised objections to the writing
down of AT-1 bonds and even suggested their conversion into shares.
"It appears that upon consideration of the
objections, the Reserve Bank made modifications in the draft scheme. It deleted
the clause of writing down AT-1 bonds," the HC said.
"The Administrator could not have taken such a
policy decision of writing down the AT-1 bonds. Nor the RBI had authorized him
to do so. The Final Reconstruction Scheme also did not authorize the
Administrator to write off the AT-1 bonds. It appears the Administrator
exceeded his powers and authority in writing off AT-1 bonds after the bank was
reconstructed on March 13, 2020," it added.
However, the court did not go into the merits of the
bonds and ruled that there were procedural lapses in the decision to write them
down.
A day later, the bank's chief executive officer,
Prashant Kumar, said it had "strong" legal grounds to appeal against
a court order.
"The judgment in itself is not questioning the
regulatory guidelines in terms of writing off (AT-1 bonds). I think there are
questions in terms of the process," Kumar said.
"We have strong legal advise and opinions which
interpret the issue in a different way and that makes a strong ground for us to
appeal in the Supreme Court," he added.