Description
Indian stockbroker Harshad Shantilal Mehta was a proven scammer. Mehta’s reputation as a market manipulator was cemented by his role in the 1992 Indian securities fraud. Before his death in 2001 at the age of 47, Mehta was found guilty on only four of the 27 criminal counts that were brought against him.
Success Story
Harshad Shantilal Mehta Big Bull Man of Integrity who was also known as Bachchan of BSE i.e. Bombay Stock Exchange. Friends, Harshad Mehta was the uncrowned king of the stock market in the 1980s and 1990s who changed the condition of the stock market. But who knew that the person whom people considered to be the Messiah of the stock market, the shareholders were considering him as the key to their destiny. He will turn out to be a big scammer who will take them to the hell of ruin.
Yes friends, Harshad Mehta is the name who committed a scam of Rs 4,500 crore in this country. Or it can be said that this person embezzled the dreams of all the shareholders of the country and their Rs 4,25 crore. Friends, in today’s Blog we will tell you who is Harshad Mehta. What was his scam? In what way did this person defraud all the shareholders of the country to the tune of Rs 4,25 crore and how did he die? Hello and welcome to this special Blog of The Mistake. Friends, the 90s started with big changes and in 1991, the then Finance Minister Manmohan Singh and Prime Minister PV Narasimha Rao took a big decision.
This was a decision to implement a new economic policy and to open the doors of the country to the world. To promote privatization and foreign investment. Overall, this was a period where people were confused about money. In such a situation, a scam came to light which shook the entire country. How big this scam of 1992 was can be gauged from the fact that after this a regulatory body named SEBI was formed for the stock market. So friends, let us know who was Harshad Mehta. Harshad Mehta was born on 29 July 1954 in Patel Moti, Rajkot, Gujarat in a small businessman family.
Friends, Harshad Mehta spent some time in Raipur, Chhattisgarh but his fate brought him there. Mumbai, the city of dreams, at that time Mumbai used to be Bombay and after that Harshad did his schooling from Holy Cross Barranbazar Secondary School, Mumbai and then after passing 12th, Harshad Mehta studied B.Com from Lala Lajpat Rai College and then next Harshad kept doing small jobs for eight years and then after passing B.Com in 1976, Harshad got his first job as a salesman in New India Insurance Insurance Company and from that time his interest started moving towards the share market and then he left the job.
Jeevandas joined a brokerage firm named Das Securities and accepted Prasanna as his mentor. Working with Prasanna Jeevandas, Harshad Mehta learned every trick of the stock market and in 1984 started his own company named Grow More Research and Asset Management and took membership as a broker in the Bombay Stock Exchange. Friends, by 1990, Harshad Mehta had become a big name in the Indian stock market. It is said that whatever Harshad Mehta touched would turn into gold.
And then friends, from here began the journey of that uncrowned king of the stock market who later came to be known as Amitabh Bachchan and Big Bull of the stock market. Friends, Harshad’s value in the stock market was more than Kohinoor. But to understand the secret of Harshad Mehta, we have to understand his way of working. Imagine what was that secret, when it was revealed, the banking system of the country was shaken. What did he do that made the stock market lose its senses and who was the person who made this revelation, friends? Harshad Mehta used to raise funds from banks through ready forward RF deals.
Friends, meaning of RF deal. There is a short term loan. Whenever banks need short term funds, they take this type of loan. Friends, this type of loan is for at least 15 days. In this, one bank pledges government bonds and lends them to other banks. After returning the amount, banks can buy their bonds again. In such transactions, banks do not actually deal in government bonds but instead issue bank receipts. What happens in this is that the bank which needs cash issues a bank receipt. It was like a Hundi, against which banks give loans.
This transaction between two banks is done through middlemen. Harshad Mehta was aware of the intricacies of such transactions. Then Harshad Mehta, taking advantage of his identity, started making money by manipulation. Then he used to invest this money in the market and earn huge profits. Friends, during that time the stock market was rising every day. Some experts also say that at that time blindly investing money in any city meant profit only.
Harshad Mehta started manipulating to take advantage of the market boom. Friends, Harshad Mehta wanted to earn profit by investing maximum money in the market. Therefore, he got fake Banking Agriculture issued. For this he weaponized two small banks. Taking advantage of his good acquaintanceship in Bank of Karad and Metropolitan Cooperative Bank, Harshad Mehta used to get bank receipts issued. He used to borrow money against these receipts and invest it in the stock market. With this, he used to earn profit in intraday and return the money to the banks. As long as the stock market kept rising, no one was even aware of it.
Friends, in the 1990s, big investors started investing money in Harshad Mehta’s company. But due to which Harshad Mehta’s name is in the stock market. He started investing his money in ACC i.e. Associated Cement Company. After Harshad Mehta invested money in ACC, it seemed as if ACC’s fortunes changed because the price of ACC’s share, which was worth ₹ 200, became ₹ 9 thousand in a short time. From Harshad Mehta’s 1550 square feet sea facing penthouse to his fondness for expensive cars, everything made him a celebrity.
Friends, this is happening for the first time that a small broker is continuously investing so much and is earning crores with every investment. Just this question turned Harshad Mehta’s good days into bad days. In 1992, Times of India journalist Sucheta Dalal exposed this secret of Harshad Mehta. Sucheta Dalal told that Harshad Mehta used to take a loan of 15 days from the bank and invest it in the stock market. Also, he used to return the money to the bank with profit within 15 days. Friends, the interesting thing is that no bank gives loan for 15 days but Harshad Mehta used to take loan for 15 days from the bank.
Harshad Mehta used to get fake BR i.e. bank receipt made from a bank. After which he could easily get money from other banks also. However, after this was revealed, all the banks started demanding their money back from him. After which Mehta could not return the money to the banks and then this Harshad Mehta scandal came to light. After this case, an article was published in the New York Times in which Business Today writer Devashish Basu had said, the problem is not Mehta, this is a unique time in the history of the Indian economy when old pages were torn. going. In such moments, scammers come out of their shell.
72 on Mehta after the revelation. Criminal charges were filed and more than 600 civil cases were filed against Harshad. However, despite all this, Harshad Mehta did not agree. He started writing advisory columns in newspapers asking whether you should invest in this company, whether you will benefit or not in this company. This will cause loss. Later it was revealed that Mehta used to give advice only to invest money in the company in which his own money was invested. Due to which crores of rupees of common people were lost. After this, something happened which had never happened before in the history of the country.
Mehta accused PM PV Narasimha Rao of taking a bribe of Rs 1 crore to save him from the case. He claimed that he had given the bribe amount to the PM in a suitcase. Harshad Mehta had revealed this in a conference and Ram Jethmalani was sitting with him to support him. Congress and Rao rejected the allegations as no evidence was ever found. Friends, after getting bail from jail, Mehta had started his business again. He was getting bail in one case after another. It seemed as if the days would change again. But in 2001 he was again arrested and sent to jail.
Where he died of a heart attack on 31 December 2011. Friends, do you know that according to a report of RBI’s Janaki Raman Committee, this scam of 1992 was worth Rs 4,500 crore. The biggest case in this was of fraud of Rs 600 crore done with SBI. Friends, Harshad Mehta’s fan following was so good that whenever he used to appear in the court, the crowd used to gather to raise slogans in his favor.
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