Explaining the provisions of the Companies Act, 2013 relating to appointment of a debenture trustee, examine the validity of appointment of the following persons as debenture trustee by a company going for issue of deben

According to section 71(5) Companies Act, 2013, the appointment of debenture trustees is compulsory in case the prospectus is issued to more than 500 persons for subscription of debentures. Further, the Rule 18 specifies that for secured debentures issued by any type of company, the company shall appoint a debenture trustee before the issue of prospectus or letter of offer for subscription of its debentures and not later than 60 days after the allotment of the debentures. The conditions governing the appointment of debenture trustees under sub-section (5) of Section 71 are prescribed under Rule 18(2) of the Companies (Share Capital and Debentures) Rules, 2014 as under: The names of the debenture trustees shall be stated in letter of offer inviting subscription for debentures and also in all the subsequent notices or other communications sent to the debenture holders. Before the appointment of debenture trustee or trustees, a written consent shall be obtained from such debenture trustee or trustees proposed to be appointed and a statement to that effect shall appear in the letter of offer issued for inviting the subscription of the debentures. A person shall not be appointed as a debenture trustee, if he; Beneficially holds shares in the company; 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. is beneficially entitled to moneys which are to be paid by the company otherwise than as remuneration payable to the debenture trustee. Is indebted to the company, or its subsidiary or its holding or associate company or a subsidiary or its holding company. Has furnished any guarantee in respect of the principal debts secured by the debentures or interest thereon. 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 2 immediately preceding financial years or during the current financial year; Is relative of any promoter or an person who is in the employment of the company as a director or key managerial personnel. Taking into account the above conditions, answers to sub-question are: Yes, Sachin can be appointed as a debenture trustee since his pecuniary relationship with the company is less than 2%. No. Akash cannot be appointed since he is indebted to an associate company of the company going to appoint the debenture trustee, since he does not fulfill the condition.