The JVG Scandal

This was after an investigation revealed that these companies had been accepting deposits in excess of their stipulated limits. Soon after, JVG downed the shutters of several of its offices in small towns of Maharashtra, Uttar Pradesh and Bihar, claiming it had detected huge irregularities in the operations. The closing of the offices created a panic among the depositors and strong voices were raised against the group in the media. In November 1997, JVG hurriedly rented an office in Gurgaon (Haryana) to accommodate irate investors. Hundreds of investors and agents camped on the grounds of the office. The agents (or the field-workers), who raised deposits from investors on behalf of JVG, were extremely worried.

The situation seemed rather bleak with rumors of the JVG group being in deep financial crisis. At this point, JVG Chairman V.K.Sharma (Sharma) dropped another bombshell on the investors. He claimed that a majority of the certificates were fake and hence they would not be paid back.

For many depositors who had invested as little as Rs 500 and who could not even dream of taking the dispute to court, it meant kissing their investments goodbye.

Analysts remarked that the investors and agents had themselves to blame for the loss - because the activities of the JVG Group had always been looked at with suspicion by the industry.