Accordingly, Justice Courtney concluded that the relationship between Luvit Foods, Mr Chean and the investors fell well short of that required by section 3(2) of the Act for close business associates. As a result, a registered prospectus should have accompanied the offers of shares. Relief provided by the Securities Act The consequence of not complying with the Act's requirements for a registered prospectus resulted in the allotment of shares in Luvit Foods to the investors being deemed void and of no effect under section 37 of the Act. In this event, the Act requires the investors to be refunded in full for their subscription, and since this was not done, the court found both Luvit Foods and Mr Chean jointly and severally liable to repay the investment monies plus interest to all of the investors. Conclusion As noted at the outset, this case provides a clear illustration of what can go wrong if the provisions of the Securities Act are not taken into account when embarking on a capital raising exercise. Potential issuers and promoters of an offer of shares or other securities (regardless of the size of the offer or the number of investors) should consider the application of the Securities Act and obtain legal advice before soliciting outside investors for a (intended) private placement. This is especially so where the placement is attempted or intended to be made under the "close business associate" exception. It is also important to remember that when making an offer of shares to