New Delhi, Feb 13: The Company Law Board (CLB) has asked defaulting Hoffland Finance Ltd (HFL) to furnish details of the terms on which it raised money from the public. The CLB directive comes after the company submitted before the board that the money raised by it were loans against securities and not fixed deposits as claimed by its depositors.The board in its interim order said, ``there are doubts whether the deposits raised by HFL are under the jurdisication of CLB''. Under Section 58A of the Companies Act, 1956, CLB has powers only over fixed deposits raised by companies.
The company took money from the public for purchasing shares for the investors and not as fixed deposits, a HFL representative told CLB. Depositors of HFL had filed a petition before the CLB for getting refund of the money from the company. CLB in turn has asked HFL for a detailed reply within two weeks on the terms and conditions under which it has raised money from the depositors.
Hoffland has raised about Rs 60-80 crore fromthe public and has been defaulting in payment since November last year. The RBI has also barred the company from raising further deposits. CLB too has asked HFL managing director Brij Bhusan Sharma to appear personally before the board in the next hearing scheduled next month. Hoffland had last November stated to its depositors of liquidity problem and the company's inability to pay the money to them. Since the beginning of this year, all the offices of HFL have been closed and depositors have been running from pillar to post to get their money back.
Last week, Sebi had suspended HFL group company, Hoffland Share Shoppe for a period of six months for being a party in creating false market in the scrip of JVG Departmental store. Sebi had also found that HFL was a party in the creation of false markets which led to scrip of JVG Departmental recording high volumes with the scrip price crossing Rs 100 mark within few days after listing.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
