MUMBAI, Feb 4: The Securities and Exchange Board of India has withdrawn the permission granted to Hoffland Finance for undertaking portfolio management activities. Sebi has also directed the company to hand over its existing portfolio to their respective clients within 15 days of the receipt of the order.The Sebi chairman has found HFL guilty, after taking into consideration the evidence and submission on records, findings of enquiry officer and the reply of HFL to the show cause notice, of not dealing professionally and in the best interest of their portfolio clients. HFL was also found guilty of creating a false market in the scrip of JVG Department Stores.
An investigation was carried out by Sebi in the JVGDS scrip to probe into the alleged creation of false market for the scrip as abnormally high volumes accompanied with price rise was noticed, right from the day of listing. Investigations revealed that HFL had purchased large quantities of shares both on BSE and on DSE and also that HFL did not actin the best interest of their portfolio clients.
Further at DSE substantial purchases of JVGDS shares were made by HFL through its associate Hoffland Shares Shoppe (HSSL) which constitutes 80 per cent of the purchases at the exchange. Investigations further revealed that HSSL was responsible for determining an abnormally high price of Rs 103 for the scrip which was issued at par. On pursual of the reply to the show cause notice, evidence on record and submissions of HSSL, the Sebi chairman concluded that the HSSL has abetted HFL in creation of false market and consequently an order has been passed suspending the broker for a period of six months. The order comes into effect on February 9.
The regulatory body has already directed HFL not to accept any fresh assignment as a merchant banker.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
