Officials have moved to tighten the bidding system for market stalls after an investigation found stallholders have been exploiting loopholes to stymie competition. The Ombudsman said some holders had acquired stalls just to keep competitors out of them and had been able to terminate the tenancies early without penalty. The probe uncovered 213 cases in the past three years where tenancies had been terminated after 12 weeks or less. Ombudsman Alice Tai Yuen-ying said there might have been cases of genuine early termination but found a number of striking examples of manipulation. Manipulation was easy, Senior Investigation Officer Kenny Tang Kin-cheung said. Only one month's notice is required to end a tenancy and there is no penalty. Vacated stalls only come up for bidding after a gap of three to five months, giving the stallholder several months without competition. In one case, a relative of one stallholder successfully held two adjoining stalls for almost two years by terminating early and then bidding for them when they went back on the market. This happened five times before an officer noticed. On one occasion, the relative terminated his tenancy after only five days. The Ombudsman recommended penalties for early termination, a larger deposit, a longer notice to quit and a ban on bidders who were not bona fide. The Food and Environmental Hygiene Department accepted the recommendations and has implemented measures to shorten the lead time for auctions. A minimum tenancy of three months is also being introduced. Ms Tai said the watchdog initiated the investigation after receiving complaints about the manipulative practice. She said it might not be widespread but it was the principle that mattered. 'They are just playing the system ... and are able to frustrate other stalls and stifle competition, resulting in a monopoly situation,' she said. 'We have to ensure we do not deprive consumers of choice.' Ms Tai said the Food and Environmental Hygiene Department 's frontline officers should have noticed the manipulation and informed their supervisors, but this was done in only one of 213 cases the Ombudsman identified.