BharatPe Battles Over Unity Bank Warrants

BharatPe, through its parent company Resilient Innovations Private Limited, has initiated legal proceedings in the Delhi High Court. The company is seeking to block any transfer or creation of charges on warrants issued by Unity Small Finance Bank. BharatPe alleges that JBCG Advisory Services and Centrum Financial Services engaged in transactions involving these warrants without obtaining necessary prior written consent.

The Delhi High Court, presided by Justice Tushar Rao Gedela, issued a notice on September 9, mandating the respondents to file their replies within two weeks. BharatPe will then have three days for its rejoinder. The matter is scheduled for its next hearing on October 1.

These proceedings are related to 190 crore warrants that were initially allotted to Centrum in November 2021. BharatPe holds a 49% stake in Unity Small Finance Bank, with Centrum holding the remaining 51%. BharatPe previously infused approximately ₹746 crore for the repayment of depositors from the erstwhile Punjab and Maharashtra Cooperative Bank.

BharatPe's petition details allegations that JBCG transferred significant amounts of Series 1 and Series 2 warrants. Furthermore, it is alleged that JBCG and Centrum created encumbrances on a substantial number of these warrants without obtaining BharatPe's explicit written approval. One cited transaction involves JBCG allegedly pledging 8 crore Series 2 warrants to Vistra ITCL (India) Limited, raising ₹200 crore and subsequently transferring 4 crore warrants to UTI Alternatives schemes.

Concerns are also raised regarding the pricing of these warrant transfers. Centrum reportedly subscribed to warrants at a nominal Re 0.01 each, later transferring 50 crore warrants to JBCG for Re 0.16 apiece. BharatPe has indicated its belief that JBCG subsequently offered these warrants at a significantly higher price of around ₹26 each. These claims are currently allegations awaiting adjudication.

This current Section 9 petition follows earlier legal actions. In July, the court had granted BharatPe interim protection in a related matter concerning Unity Bank's share capital and associated shareholder agreement rights, also considering contractual restrictions on warrant transfers. BharatPe had previously invoked arbitration on August 11, nominating former Supreme Court judge Justice Vineet Saran as its arbitrator.