Singapore legislation
Clause 262
Clause 262
Qualifications of trustee for debenture holders
(1)
Subject to this section, every corporation and every other entity which makes an offer or invitation to the public in respect of debentures shall make provision in those debentures or in a trust deed relating to those debentures for the appointment of a trustee corporation as trustee for the holders of the debentures.
(2)
Where a borrowing corporation is required to appoint a trustee for the holders of any debentures in accordance with subsection (1), it shall not allot any of those debentures until the appointment has been made and the trustee corporation has consented to act as trustee.
(3)
Without leave of the court, a trustee corporation shall not be appointed, hold office or act as trustee for the holders of debentures of a borrowing corporation if that trustee corporation is —
a shareholder who beneficially holds shares in the borrowing corporation;
beneficially entitled to moneys owed by the borrowing corporation to it;
a corporation that has entered into a guarantee in respect of the principal debt secured by those debentures or in respect of interest thereon; or
a corporation that is related to —
any corporation of a kind referred to in paragraphs (a), (b) and (c); or
the borrowing corporation.
(4)
Subsection (3) does not prevent a trustee corporation from being appointed, or from holding office or acting as trustee for the holders of debentures of a borrowing corporation by reason only that —
the borrowing corporation owes to the trustee corporation or to a corporation related to the trustee corporation any moneys so long as such moneys are —
moneys that (not taking into account any moneys referred to in sub-paragraphs (ii) and (iii)) do not, at the time of the appointment or at any time within a period of 3 months after an offer or invitation in respect of the debentures is first made to the public, exceed 10% of the amount of the debentures in respect of which the offer or invitation is proposed to be made to the public within that period and do not, at any time after the expiration of that period, exceed 10% of the amount owed by the borrowing corporation to the holders of the debentures;
moneys that are secured by, and only by, a first mortgage over land of the borrowing corporation, or by any debentures issued by the borrowing corporation to the public or by any debentures not issued to the public which are issued pursuant to the same trust deed as that creating other debentures issued at any time by the borrowing corporation to the public or by any debentures to which the trustee corporation, or a corporation that is related to the trustee corporation, is not beneficially entitled; or
moneys to which the trustee corporation, or a corporation that is related to the trustee corporation, is entitled as trustee for holders of any debentures of the borrowing corporation in accordance with the terms of the debentures or of the relevant trust deed; or
the trustee corporation, or a corporation that is related to the trustee corporation, is a shareholder of the borrowing corporation in respect of shares that it beneficially holds, so long as the shares in the borrowing corporation beneficially held by the trustee corporation and by all other corporations that are related to it, do not carry the right to exercise more than 5% of the voting power at any general meeting of the borrowing corporation.
(5)
Nothing in subsection (3) shall —
affect the operation of any debenture or trust deed issued or executed before 29th December 1967; or
apply to or in relation to the trustee for the holders of any such debentures,unless pursuant to any such debentures or trust deed a further offer or invitation in respect of debentures is made after that date.
(6)
Nothing in this Subdivision shall apply to a prescribed corporation, and a prescribed corporation which makes an offer or invitation in respect of debentures shall not be required to make provision in those debentures or in a trust deed relating to those debentures for the appointment of a trustee corporation as trustee for the holders of the debentures.
(7)
Where a prescribed corporation which makes an offer or invitation in respect of debentures, makes provision in those debentures or in a trust deed relating to those debentures for the appointment of a trustee (whether or not a trustee corporation) for the holders of the debentures, nothing in this Subdivision shall apply to those debentures, the trust deed or the trustee.
(8)
For the purposes of subsections (6) and (7), “prescribed corporation” has the same meaning as in section 239(4).
(9)
If default is made in complying with this section, the corporation and every officer of the corporation who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $20,000 and, in the case of a continuing offence, to a further fine not exceeding $2,000 for every day or part thereof during which the offence continues after conviction.