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CS Executive · Company Law and Practice · Debt Instruments - Concepts

Nilgiri Tea Ltd has issued debentures, and Orion Holdings Ltd, a body corporate, is a holder. Orion wants a person to attend and vote at a meeting of the creditors of Nilgiri held under a trust deed. What does the Companies Act, 2013 provide?

Orion may authorise a person by a resolution of its directors or other governing body to represent it at the creditors' meeting. Under Section 113, that person has the same rights and powers, including voting by proxy and postal ballot, as an individual debenture-holder.

  1. AOnly an individual holder can attend such meetings
  2. BOrion may authorise a person by resolution of its directors or other governing body, who may exercise the same rights as Orion could if it were an individual holderCorrect
  3. COrion must appoint the debenture trustee as its representative
  4. DThe authorised person may attend but cannot vote by proxy or postal ballot

Explanation

Section 113(1)(b) lets a body corporate that is a creditor or debenture-holder authorise a representative by resolution of its directors or governing body. Section 113(2) gives that person the same rights, including voting by proxy and postal ballot. The other options contradict this.

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