March 06, 1998
PR No. 45/1998


SEBI carried out investigation in the scrip of JVG Departmental Stores Ltd. (JVG DS) to probe into the alleged creation of false market in this scrip. Abnormally high volumes accompanied with unusual price rise was noticed right from the first day of listing in September 1996. The investigations prima facie revealed that Hoffland Finance Ltd. (HFL) had purchased large quantities of the shares of JVG DS on BSE and NSE, and was involved in the creation of a false market by maintaining the traded price at an artificially high level. Investigations also revealed that HFL did not act in the best interest of their portfolio clients. Pursuant to submission of the investigation report enquiry proceedings were initiated to inquire into the violations of SEBI (Broker and Sub-broker) Rules and Regulations, 1992 read with SEBI (Fraudulent and Unfair Trade Practices) Regulations and by HFL. After taking into consideration the evidence and submissions on record, findings of the Enquiry Officer and the reply by HFL to the show cause notice, Chairman, SEBI found HFL guilty of creating a false market in the scrip of JVG DS. In view of this, an order has been passed under SEBI (Broker and Sub-broker) Rules and Regulations, 1992, suspending HFL from all the Exchanges where they are members for a period of six months with immediate effect. It may be mentioned that earlier directions had already been issued under section 11 B of the SEBI Act, read with Regulation 11 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, to HFL on July 31, 1997 for not undertaking any fresh broking activity in respect to Jaipur Stock Exchange and Bangalore Stock Exchange, where HFL is a registered member, till further orders.