The debenture trustee of DC Limited has observed that the company's management is suspected of siphoning off funds, leading to financial losses for the debenture holders. Is the situation a valid reason for the debenture

Investigation into the company's affairs on application made by members or other persons As per section 213 of the Companies Act, 2013, the Tribunal may make such order on an application made to it by the members of requisite numbers or voting power or any other person or otherwise, if it is satisfied that the circumstance suggest, including inter alia, that the business of the company is being conducted with intent to defraud its creditors, members or any other person or otherwise for a fraudulent or unlawful purpose or in a manner oppressive to any of its members or that the company was formed for any fraudulent or unlawful purpose; It was held in the case of Comfort Intech Ltd vs. Ravi Kumar Distilleries Ltd (2019) 108 NCLT Chennai that the Lead Managers for IPO is entitled to file an application before the Tribunal alleging that the directors of the company are involved in diverting IPO proceeds of company to their associates under provisions of Section 213 of the Companies Act 2013. In this case scenario it is seen that the business of the company is being conducted with intent to defraud its creditors, members, or any other person (i.e. debenture holders) or otherwise for a fraudulent or unlawful purpose. This is a good/valid reason for making such an application. An application can be made by any person other than the members. Hence, Debenture-trustee can make an application for necessary order of the Tribunal. If the Tribunal issues the order that the affairs of the company ought to be investigated, the Central Government shall appoint one or more competent persons as inspectors to investigate into the affairs of the company and to report thereon. Hence, by applying the above provisions debenture trustee of DC Limited can make application to National Company Law Tribunal and Central Government shall appoint competent person to conduct investigation.