The SFIO had been investigating cases against 13 companies of JVG Group since 2005. The ministry has said that it would take another two months time to scrutinise the report submitted by the SFIO. Following that, appropriate actions would be taken against the firms.
According to an MCA official, the charge against JVG Finance, a non-banking finance company, was that it had raised money from investors and had assured them high rates of interest, as much as 30%, and later defaulted on payments. JVG Finance has also been accused of having diverted the money raised from investors to its sister concerns. The official said that the company had violated the RBI guidelines by raising deposits in excess of its entitled limit. Also, the interest amount was not as per the prescribed limit and transactions were also not accounted in the financial statements of the company as required.
The Reserve Bank of India in October 1997 barred the JVG Group, promoted by one Vijay Kumar Sharma, and three of its group companiesJVG Finance, JVG Leasing Ltd and JVG Securitiesfrom accepting deposits from public. In July 2004, the Securities & Exchange board of India (Sebi) had de-listed JVG Departmental Stores for violation of listing agreement clauses for more than three years.
The irregularities surrounding JVG Group first came to light in 1997 when it refused to refund the amount of Rs 45 crore it had raised from a public issue in March that year and admitted that it had raised deposits beyond the prescribed limits.