In a huge relief to 63 moons and other investors, the Bombay High Court on Friday struck down the order of the manager of YES Bank which had written down more than Rs 8.3 billion of AT1 bonds overnight, leaving investors in the lurch
This will benefit all bondholders including 63 moon techs which had bonds worth ₹300 crore.
What the petition said
63 Moons had filed a petition in court against the bank’s decision to cancel the AT1 bonds as part of a bailout plan. The company had invested in ₹3000 crore bonds of YES Bank’s amortized AT1 bonds and has held these papers since March 2018.
The petition, filed on June 1 against YES Bank, the Reserve Bank of India and the RBI-appointed administrator, claimed that the company’s Rs 300 crore investment in AT1 debentures had been completely misappropriated. with the promise of good returns.
The company argued that a cancellation of the bondholders’ claim, under Basel-III rules and international best practice, can only take place when the share capital has virtually lost its value.
RBI, which took over the bank, called off YES Bank’s so-called AT1 bonds worth ₹8,415 crore as part of a revival plan.
