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Khushi Patel made post

What happens to Yes Bank after the High Court refused relief in the Zee case?

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Arya Nanda answered.
1 month ago

The Supreme Court had recently granted relief to Zee promoters in the Yes Bank case but the bank is not taking it lying down. Yes Bank plans to seek recourse from the Supreme Court after the Mumbai High Court refused grant interim relief to Yes Bank against Zee promoters selling shares. This pertains to a $52 million loan given by Yes Bank to Zee.

The bone of contention was a personal guarantee that Subhash Chandra had offered for the said loan. This loan contract also had a covenant that Zee promoters would not sell shares before 3 years, which was breached when the banks and financers where the shares were pledged had sold these shares to recover their dues from Yes Bank.

Now there is a fresh twist to the case. Zee promoters have argued that they had only provided a letter of comfort and not a personal guarantee to Yes Bank. The court had refused to treat the letter of comfort as a personal guarantee and will now become an issue of letter versus spirit of the loan agreement. It remains to be seen which view prevails.