Justify the following statements
1. The company secretary should take certain precautions while corresponding with debenture holders.
Ans: The company secretary has to take following precautions while corresponding with debenture holders.
(a) Prompt Reply: In any correspondence prompt reply is very important. The company Secretary must give prompt replies to any queries of the debenture holders.
(b) Correct or Precise Information: The letter acts as a representative of the organization. Secretary should always provide correct, up to date and factual information to the debenture holders in precise and compact manner.
(c) Courtesy: The letter to the debenture holders should be polite. A courteous letter shows empathy, respect and mutual understanding.
(d) Transparency: While corresponding with debenture holders, secretary must maintained transparency. To maintain greater transparency it is necessary to disclose all correct and accurate information of the company.
(e) Secrecy: The secrecy of any business is essential. The Secretary must keep secrecy regarding the affairs of the company while corresponding with the debenture holders and shall not disclose any confidential matter of the Company.
(2) There are certain circumstances when a secretary has to correspond with debenture holders.
Ans. The circumstances when a secretary has to correspondence with debenture holders are:
(a) Informing the applicant about allotment of debentures.
(b) Informing about the payment of interest through: • Interest Warrant • Electronic Payment of Interest
(c) Letter for conversion of debentures into equity shares.
(d) Letter for redemption of debentures. Thus, it is rightly justified that, there are certain circumstances when a secretary has to correspondence with debenture holders.