Pursuant to receipt of reference from the State Authorities SEBI initiated investigation into the Sunshine Infrabuild Corporation limited (“SICL / Company”) and found that the Company was raising funds by issuing various types of debentures through private placement. Further, in due course of investigation it was found that the Company mobilized funds from more than 8071 investors, thereby making the issue of debentures a deemed public issue of securities under the first proviso to section 67(3) of the Companies Act, 1956, which contemplates that any offer or invitation of securities to 50 or more than 50 persons as a deemed public issue wherein the applicable rules and regulations of SEBI is required to be followed by the issuer Company.

As alleged by the SEBI the Company raised money to the tune of approx. Rs. 26.62 Crores during the financial years 2010-11 to 2012-13 without providing the exit opportunity to the investors i.e. without getting listing of the securities(debentures in the instant case)on a stock exchange. Thereby it is alleged and held that the issue of securities in the instant case was launched and executed in defiance of the applicable legal regime.

In exercise of the powers under 11,11(4), 11A and 11B of the SEBI Act, 1992 and in light of the issues involved in the present case, SEBI held that the Directors and Company are co-extensively responsible for the alleged violations and inter-alia ordered for making refunds along with interest of 15% p.a. in terms of section 73(2) of the Companies Act, 1956 and forthwith cease to mobilize any fresh funds from public and prohibiting from accessing securities market for 4 years from the date of passing of the order.