The
Bombay High Court has refused to grant any interim relief to
YES Bank in the
ASK Group transaction involving founder
Asit Koticha.
The bank wanted the court to direct Koticha to deposit about Rs 379 crore from the proceeds he is receiving after selling his stake in flagship group company ASK Investments to private equity major Blackstone.
In August, Singapore-based BCP Topco XII Pte Ltd, an investment vehicle of Blackstone, had entered into share purchase agreements with Koticha to acquire his majority shareholding in ASK Investment Managers Ltd.
“I have no manner of doubt that the balance of convenience is not with the plaintiff (Yes Bank),” observed the court in its 17-page order. “The prejudice that is likely to be caused to one or more of the many defendants far outweighs any possible prejudice to the plaintiff.”
Justice GS Patel, in his order of September 24, has now posted the hearing of the case to November 29
The genesis of the dispute lies in the credit facility of Rs 330 crore extended by Yes Bank in 2015 to Lily Realty Pvt Ltd, a company owned by Asit Koticha. At the time of securing the loan facility, Koticha had extended ‘Shortfall Security’ under which if the realty firm fails to pay its dues to the Yes Bank, he will pay the shortfall.
Later, Lily Realty was classified as NPA in February 2020.
Munaf Virjee, Managing Partner of law firm ABH Law that appeared for Asit Koticha, and Senior Advocate Ravi Kadam declined to comment.
A mailed query to Yes Bank did not elicit any response. Rohan Dakshini, partner at Rashmikant & Partners, who appeared along with Senior Advocate Dinyar Madon for the bank, also did not comment.
On August 30, 2021, Yes Bank issued a shortfall demand notice to Koticha asking it to fund the shortfall to the extent of over Rs 379 crore. When Koticha declined, the bank approached the court.
Koticha agreed to sell his majority stake to BCP Topco at Rs 707 a share, for a total consideration of over Rs 606 crore. However, from this amount about Rs 307 crore and Rs 145 crore would be paid to IIFL Wealth Prime and IDBI Trusteeship, respectively, under various debt obligations.
Lawyers for Yes Bank argued that whatever remains after paying both IIFL Wealth Prime and IDBI Trusteeship should be put in an escrow account or should be deposited in court.
However, countering this, Koticha, through his lawyers argued that this is nothing but a recovery suit.
“It cannot be that the attachment before judgment is obtained against Koticha here (High Court) and the final relief that is sought is to be obtained in the Debts Recovery Tribunal (DRT) against Lily Realty and possibly also against Koticha as a personal guarantor,” argued the counsel for Koticha.