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Companies Act, 1973 (Act No. 61 of 1973)

Chapter V: Share capital, Acquisition by Companies of own Shares, Shares, Allotment and Issue of Shares, Members and Register of Members, Debentures, Transfers, and Restrictions on Offering Shares for Sale

Debentures

124. Power to re-issue redeemed debentures in certain cases

 

 

1) Where a company has redeemed any debentures previously issued, not being debentures convertible into shares of the company, it shall, unless its articles or the conditions of issue of such debenture expressly otherwise provide or the debentures have been redeemed in pursuance of an obligation on the part of the company to redeem them (not being an obligation enforceable only by the person to whom the redeemed debentures were issued or his successors in title) have and be deemed at all times to have had power to keep the debentures alive for the purpose of re-issue, and, where a company has purported to exercise such a power, it shall have and be deemed at all times to have had power to re-issue the debentures either by re-issuing the same debentures or by issuing other debentures in their place, and upon such a re-issue the person entitled to the debentures shall have and shall be deemed at all time to have had the same rights and priorities as if the debentures had not previously been issued.

 

2) Where with the object of keeping debentures alive for the purpose of re-issue they have been transferred to a nominee of the company, a transfer from that nominee shall be deemed to be a re-issue for the purposes of this section.

 

3) Where a company had deposited any of its debentures to secure advances from time to time on current account or otherwise, the debentures shall not be deemed to have been redeemed by reason only of the account of the company having ceased to be in debit whilst the debentures remained so deposited.

 

4) Nothing in this section shall prejudice any power reserved to a company by its debentures or the securities therefor, to issue debentures in the place of any debentures paid off or otherwise satisfied or extinguished.