Regulation 13A - Debenture Trustee not to act for an associate - Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993

Debenture Trustee not to act for an associate. 1 [13A. 2 [A person shall not be appointed as a debenture trustee, in case- (a) the debenture trustee,- (i) is an associate of the body corporate; (ii) beneficially holds shares in the company; (iii) is a promoter, director or key managerial personnel or any other officer or an employee of the company or its holding, subsidiary or associate company; (iv) is beneficially entitled to moneys which are to be paid by the company otherwise than as remuneration payable to the debenture trustee; (v) is indebted to the company, or its subsidiary or its holding or associate company or a subsidiary of such holding company; (vi) has furnished any guarantee in respect of the principal debts secured by the debentures or interest thereon; (vii) has any pecuniary relationship with the company amounting to 2% or more of its gross turnover or total income or ₹50 lakh or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year; (viii) is relative of any promoter or any person who is in the employment of the company as a director or key managerial personnel; (ix) is likely to have conflict of interest in any other manner: Provided that this requirement shall not be applicable in respect of debentures issued: (i) wherever there is guarantee by the state / central government for the debentures issued.] (b) it has lent and the loan is not yet fully repaid or is proposing to lend money to the body corporate: Provided that this requirement shall not be applicable in respect of debentures issued prior to the commencement of the Companies (Amendment) Act, 2000, where- (i) recovery proceedings in respect of the assets charged against security has been initiated, or (ii) the body corporate has been referred to Board for Industrial and Financial Reconstruction under the Sick Industrial Companies (Special Provisions) Act, 1985, prior to commencement of the Securities and Exchange Board of India (Debenture Trustees) (Amendment) Regulations, 2003.] ********* 1 Substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2003, w.e.f. 4-7-2003. Earlier regulation 13A was inserted by the SEBI (Debenture Trustees) (Second Amendment) Regulations, 2000, w.e.f. 8-8-2000. Prior to its substitution, regulation 13 A read as under : 13 A. Debenture Trustee not to act for an associate No debenture trustee shall act as such for any issue of debentures in case- (a) it is an associate of the body corporate, or (b) it has lent or is proposing to lend money to the body corporate : Provided that in respect of debentures issued prior to the commencement of these regulations, the debenture trustee for such issue shall also comply with this regulation within two years from the commencement of these Regulations. 2 Regulation 13A and clause (a) thereunder substituted by the SEBI (Debenture Trustees) (Amendment) Regulations, 2017, w.e.f., 13-7-2017. Prior to such substitution, the provisions read as follows: No debenture trustee shall act as such for any issue of debentures in case- (a) it is an associate of the body corporate, or