Khushboo Maheshwari (Company Secretary) (548 Points)
16 June 2010Hi, can a company issue non convertible unsecured debentures, the FEMA guidelines provide for issue of mandatorily convertible debentures....please clarify
Ashish Gupta
(CS & Legal)
(114 Points)
Replied 16 June 2010
FEMA Guideline provides that a Company can issue only Fully Convertible Debentures / Fully Convertible Preference Shares and Equity Shares to Non-residents as a part of FDI.
Thus, any issue of Non-Convertible Debentures to non-resident will be treated as ECB and not as FDI.
Rgds,
Ashish
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