Section 155, The Companies Act, 2009

(1) Every company which offers debentures to the Publicfor subscription or purchase shall, before issuing any of the debentures, execute a debenture trust deed in respect of them and procure the execution of the deed by the trustee for the debenture holders appointed by the deed. (2) No debenture trust deed shall cover more than one class of debentures, whether or not the trust deed is required by this section to be executed. (3) Where a trust deed is required to be executed by this section but has not been executed, the court, on the application of a debenture holder concerned, may– (a) order the company to execute a trust deed; (b) direct that a person nominated by the court shall be appointed to be trustee; and (c) give such consequential directions as it thinks fit, as to the contents of the trust deed and its execution by the trustee. (4) For the purposes of this Act, debentures shall belong to different classes if different rights attach to them in respect of– (a) the rate of, or dates for payment of interest; (b) the dates when, or the instalments by which, the principal of the debenture shall be repaid, unless the difference is solely that the class of debentures shall be repaid during a stated period of time and particular debentures may be repaid at different dates during that period according to selections made by the company or by drawings, ballot or otherwise; (c) any right to subscribe for or convert the debentures into shares in, or other debentures of, the company or any other (d) the powers of the debenture holders to realise any security. (5) Debentures further belong to different classes– (a) if they do not rank equally for payment when any security invested in the debenture by holders under any trust deed is realised; or (b) when the company is wound up, or in circumstances where the security may be realised, pursuant to paragraph (d) of subsection (4) the subject matter of such security or the proceeds thereof, or any assets available to satisfy the debentures, is or are not to be applied in satisfying the debentures strictly in proportion to the amount of principal, premiums and arrears of interest to which the holders are respectively entitled. (6) A debenture is covered by a trust deed if the holder of the debenture– (a) is entitled to participate in any money payable by the company under the deed; or (b) is entitled to the benefit of any mortgage, charge or security created by the deed, whether alone or together with other persons. (7) If a company issues debentures in circumstances in which this section requires a debenture trust deed to be executed without such a deed having been executed in compliance with this Execution of 106 107 section, or if the company issues debentures under a trust deed which covers two or more classes of debentures, each director of the company who is in default commits an offence and is liable on conviction to a fine not exceeding Le5,000,000 154. or not, shall state– (a) the maximum sum which the company may raise by issuing debentures of the same class; (b) the maximum discount which may be allowed on the issue or re-issue of the debentures, and the maximum premium at which the debentures may be made redeemable; (c) the nature of any assets over which a mortgage, charge or security is created by the trust deed in favour of any person other than of the trustee for the benefit of the debenture holders equally, except where such a charge is a floating charge or a general floating charge, the identity of the assets subject to it; (d) the nature of any assets over which a mortgage, charge or security has been or will be created in favour of any person other than the trustee for the benefit of the debenture holders equally, and except where such a charge is a floating charge or a general floating charge, the identity of the assets subject to it; (e) whether the company has created or will create any mortgage, charge or security for the benefit of some, but not all of the holders of debentures issued under the trust deed; (f) any prohibition or restriction on the power of the company to issue debentures or to create mortgages, charges or any security on any of its assets ranking in priority to, or equally with the debentures issued under the trust deed; (g) whether the company shall have power to acquire debentures issued under the trust deed before the date of their redemption and to re-issue the debentures; (h) the rate of and the dates on which interest on the debentures issued under the trust deed shall be paid and the manner in which payment may be made; (i) the date or dates on which the principal of the debentures issued under the trust deed shall be repaid, and unless the whole principal is to be repaid to all the debenture holders at the same time, the manner in which redemption shall be effected, whether by the payment of equal instalments of principal in respect of each debenture, or by the selection of debentures for redemption by the company or by drawing, ballot, or otherwise; (j) in the case of convertible debentures, the dates and terms on which the debentures may be converted into shares and the amounts which may be credited or paid up on those shares by virtue of the debentures held by them; (k) the circumstances in which the debenture holders shall be entitled to realise any mortgage, charge or security invested in the Contents of 108 109 trustee or any other person for their benefit (other than the circumstances in which they are entitled to do so by this Act); (l) the powers of the company and trustee to call meetings of the debenture holders and the rights of debenture holders to require the company or the trustee to call such meetings; (m) whether the rights of debenture holders may be altered or abrogated and if so, the conditions which must be fulfilled, and the procedure which must be followed, to effect such an alteration or abrogation; and (n) the amount or rate of remuneration to be paid to the trustee and the period for which it shall be paid, and whether it shall be paid in priority to the principal, interest and costs in respect of debentures issued under the trust deed. (2) If debentures are issued without a covering debenture trust deed being executed, the statements required by subsection (1) shall be included in each debenture or in a note forming part of the same document or endorsed on it, and in applying that subsection references to “the debenture trust deed” shall be construed as references to all or any of the debentures of the same class. (3) Subsection (2) shall not apply if the debenture is the only debenture of the class to which it belongs which has been or may be issued, and the rights of the debenture holder may not be altered or abrogated without his consent. (4) Any director involved in the issue of a debenture in violation of this section shall be guilty of an offence.