A controversial stockbroker with roots in Bombay named Harshad Mehta fraudulently withdrew funds from banks and used them to inflate share prices on the Bombay Stock Exchange (BSE). He committed what is currently regarded as the largest Indian securities scam ever by taking advantage of flaws in the country's banking and stock markets. In 1998, Harshad Mehta was found guilty of his crimes, imprisoned, and died in 2001 from a heart attack. In 2020, the 4,000 crore rupee Harshad Mehta securities scandal will be worth 24,000 crores.

Harshad Mehta was born on July 29, 1954, in Paneli Moti, Rajkot, Gujarat (he was 47 years old at the time of his death). His father used to manage a small textile shop in Mumbai's Kandivali, where he spent his early years. Harshad finished his education when his family later relocated to Raipur, Chhattisgarh. He moved back to Mumbai, where in 1976, he gained a B.Com degree from Lala Lajpat Rai College.

Family

Middle-class Gujarati Jains were the parents of Harshad Mehta. Sudhir Mehta, Hitesh Mehta, and Ashwin Mehta were his three siblings. His mother, Rasilaben Mehta, was a stay-at-home mom, while his father, Shantilal Mehta, owned a small textile business. Ashwin Mehta, Harshad's brother, worked as a stockbroker for Harshad. At the age of 50, Ashwin completed his legal education and took on all of the cases that were still pending against him.

Wife and Kids

Jyoti Mehta was the wife of Harshad Mehta. Atur Mehta is the son of Harshad. There are several family photos of Harshad Mehta that you may find, but there isn't one of his kids because he was never given the spotlight.

Career

In addition to pursuing a B.Com at Lala Lajpatrai College in Mumbai, Mehta worked several odd jobs, including selling cement or classifying diamonds. He was a salesman with the New India Assurance Company Limited as well. He became so interested in the stock market during this time that he quit his previous job and began working for P. Ambalal, a stockbroker connected to the Bombay Stock exchange, in 1980. (BSE). He spent a year there before joining a brokerage company called Harjivandas Nemidas Securities in 1981 to work in lower-level clerical positions.

Harshad founded his own stock brokerage company, GrowMore Research and Asset Management, in 1984 after learning about how the stock market operated. At this company, he first encountered broker Prasann Pranjivandas, and he later came to think of him as his "guru." by 1990, Harshad had already established a reputation that encouraged many people to contribute to his company and use his services.

He quickly rose from poverty to greatness and amassed millions of crores of rupees via his activities. He owned a sea-facing 15,000 square-foot penthouse in Worli, Mumbai, and a collection of opulent vehicles, including an imported Toyota Lexus worth 40 lakh rupees. The media had enhanced his reputation to the point where he was called "The Amitabh Bachchan of the stock market" and "The Big Bull," among other nicknames.

The Securities Scam and Exposure of 1992

The Scam: Up until the early 1990s, banks were prohibited from making stock market investments. Due to his ties with bank executives, Harshad persuaded them to give him a direct deposit into his account in exchange for greater interest rates. Additionally, the banks created phony Bank Receipts (B.R.) in his name. He used to use the vast sum of money that he shrewdly obtained from banks to buy a select few shares, which would then raise the price of those shares.

As a result, the price of those shares would increase even further. This would entice additional investors to invest in those specific shares. For instance, in 1991, Harshad bought shares of the Associated Cement Company (ACC) and increased their value from 200 to 9,000 in just three months. He used to sell off his shares after the share price secretly rose sharply to collect an enormous profit.

Effects of the Fraud

At the Stock Exchange

The 1992 fraud severely impacted the nation's banking system and capital market. The Sensex, trading at 4467 points in January 1992 as the scam was being exposed, abruptly fell to 2529 points in August. The money market lost more than Rs. 1,000,000 crores as a result.

Regarding the Banking System

Banks were left with invalid B.R.s and a staggering loss of Rs. 4,000 crores after the scam was revealed. The previous chairman of Vijaya Bank, Mr. B.B. Shetty, who allegedly wrote false checks to Harshad Mehta, committed himself because of it.

Regarding the Political Climate

After the scam was revealed, several politicians, including RBI Governor S. Venkitaramanan, brokers like Pallav Sheth and Ajay Kayan, and business people like Aditya Birla, came under fire. The political climate also became more charged after Harshad Mehta gave a press conference in which he asserted that he had paid P.V. Narasimha Rao, India's Prime Minister at the time, Rs. One crore to remove himself from the scam case.

Conviction, Arrest, and Sentence

The CBI detained Harshad Mehta in November 1992, and was later charged with 72 criminal offenses and more than 600 other financial and banking-related offenses. After three months, he received bail after retaining the services of renowned attorney Ram Jethmalani.

Once more, in 1999, the Bombay High Court found Harshad Mehta guilty of the Maruti Udyog Scam and sentenced him to five years in prison.

Death

Mehta suffered from chest problems while serving his five-year sentence; he was transported to a Mumbai municipal hospital, where he later passed away from a heart attack on December 31, 2001.

Biography