Axis Trustee files contempt plea against Yes Bank over AT-1 bonds

Axis Trustee Services Ltd has taken the Supreme Court to task over Yes Bank Ltd's failure to comply with the court's 15 October order restoring ₹8,415 crore of additional tier-I (AT-1) bonds, the company informed bondholders on Wednesday. The filing seeks directions for compliance and the restoration of the bonds. In an email to investors, Axis Trustee claimed it had not received a clear plan from the bank for the bonds' return or the judgment's implementation.

The subsidiary of Axis Bank plans to use all legal avenues and transaction documents "in the interest of bondholders." The move follows a notice issued on 28 October demanding the bank restore the bonds within three days. Yes Bank acknowledged the Supreme Court's ruling but said it is evaluating the judgment's implications and will take permissible legal actions.

The court dismissed appeals from Yes Bank, the Reserve Bank of India, and the Union government, maintaining that the AT-1 bond coupon payments should remain unaffected. The judgment aimed to revive investor hopes for recovery, but bondholders are still waiting for clarity on when the bonds will be reinstated. The Yes Bank AT-1 Bondholders Association, representing around 400-450 investors, mostly senior citizens, has expressed concern about the delay, with some members having passed away during the legal battles.

Reinstating the bonds would restore investors' rights, but the principal would not be immediately repaid, depending on market liquidity and bond price.