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

If a Government directs under the Companies Act, 2013 in public interest that debentures it holds be converted into shares although the terms of issue contained no conversion option, and the company finds the conversion terms unacceptable, the company may:

The company may appeal to the Tribunal within sixty days from the date of communication of the Government's order. The lack of a conversion option in the debenture terms does not allow the company to ignore the order, and the Tribunal decides after hearing both sides.

  1. AAppeal to the Tribunal within sixty days from the date of communication of the orderCorrect
  2. BAppeal to the Tribunal within thirty days of the debenture maturity
  3. CIgnore the order since no option existed in the terms
  4. DApproach the debenture trustee within fifteen days

Explanation

Section 62(4) allows the Government to order conversion even without an option in the terms. The proviso lets the company appeal to the Tribunal within sixty days from communication of the order. Absence of an option does not allow the order to be ignored.

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