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CS Executive · Corporate Accounting and Financial Management · Accounting for Debentures

If a Government considers it necessary in the public interest, which statement about converting a company's debentures held under its loan into shares is correct as per the Companies Act, 2013 text given?

The Government may direct conversion in the public interest on reasonable terms even where the debenture or loan terms had no conversion option. A company not accepting the terms may appeal to the Tribunal within sixty days from the date the order is communicated.

  1. AIt may order conversion on reasonable terms even if the debenture terms had no conversion option, and the company may appeal to the Tribunal within sixty days of communicationCorrect
  2. BIt may order conversion only if the debenture terms contained a conversion option approved by special resolution
  3. CIt may order conversion, and the company has no right of appeal
  4. DIt may order conversion, and the company may appeal to the Tribunal within thirty days

Explanation

Where debentures were issued, or a loan obtained from any Government, that Government may by order direct conversion into shares on terms it considers reasonable, even without a conversion option in the terms of issue. If the company finds the terms unacceptable it may appeal to the Tribunal within sixty days from communication of the order.

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