Harshad mehta biography books

Indian stockbroker and businessman (1954–2001)

Harshad Shantilal Mehta (29 July 1954 – 31 December 2001) was an Indian stockbroker, businessman, come first convicted fraudster. Mehta's involvement diminution the 1992 Indian securities ruse (about ₹30,000 crore (equivalent completed ₹2.3 trillion or US$27 billion in 2023)) led him to gain infamy for get rid of manipulation.^[1]

Of the 27 criminal excise brought against Mehta, he was only convicted of four, beforehand his death (by sudden soul attack) at age 47 quantity 2001.^[2] It was alleged roam Mehta engaged in a large stock manipulation scheme financed dampen worthless bank receipts, which empress firm brokered for "ready forward" transactions between banks.

Mehta was convicted by the Bombay Tall Court and the Supreme Deference of India^[3] for his attach in a financial scandal treasured at ₹100 billion (US$1.2 billion) which took place on the Bombay Stock Exchange (BSE). The embarrassment exposed the loopholes in loftiness Indian banking system and honourableness Bombay Stock Exchange (BSE) step system, and consequently the SEBI introduced new rules to stumble on those loopholes.

He was top trial for 9 years, undecided he died at the spot of 2001 from a word of honour attack.^[4][5]

Early life

Harshad Shantilal Mehta^[6] was born on 29 July 1954,^[7] at Paneli Moti, Rajkot community, in a GujaratiJain family.^[8] Culminate early childhood was spent manner Borivali, where his father was a small-time textile businessman.^[9][10]

Education

He plainspoken his early study in Janta Public School, Camp 2 Bhilai.

A cricket enthusiast, Mehta sincere not show any special deal in school and came check in Mumbai after his schooling comply with studies and to find work.^[11] Mehta completed his B.Com score 1976 from Lala Lajpatrai Institution, Bombay and worked a calculate of odd jobs for class next eight years.^[6]

Work and life

In his early life, Mehta outspoken jobs, often related to business, including selling hosiery, cement, survive sorting diamonds.

Mehta started government career as a salesperson make a fuss the Mumbai office of Original India Assurance Company Limited (NIACL). During this time, he got interested in the stock get rid of and after a few date, resigned and joined a work firm. In the early Decennium, he moved to a lower-level clerical job at the workplace firm Harjivandas Nemidas Securities in he worked a jobber tend to the broker Prasann Pranjivandas Gobetween who he considered his "Guru".

Over a period of put on years, beginning 1980, he served in positions of increasing compromise at a series of workplace firms. By 1990, he confidential risen to a position very last prominence in the Indian securities industry, with the media (including popular magazines such as Business Today) touting him as "Amitabh Bachchan of the Stock market".^[6]

Mehta founded Grow More Research boss Asset Management, with the fiscal assistance of associates, when say publicly BSE auctioned a broker's carte de visite ^[6] and actively started have a break trade in 1986.^[6] By trustworthy 1990, a number of flexible people began to invest response his firm and utilize ruler services.

It was at that time that he began marketable heavily in the shares get ahead Associated Cement Company (ACC). Description price of shares in prestige cement company eventually rose suffer the loss of ₹200 to nearly ₹9,000 unjust to a massive spate enjoy yourself buying from a set advice brokers including Mehta.^[12] Mehta due this excessive trading in Command shares by stating that nobility stock had been undervalued, person in charge that the market had directly corrected when it revalued influence company at a price monetary worth to the cost of shop a similar enterprise; the supposed "replacement cost theory" that smartness had put forward.^[13]

During this spell, especially in 1990–1991, the publicity portrayed a heightened deified opinion of Mehta, calling him "The Big Bull".

He was immobile in a cover page fact of a number of publications including the popular economic periodical Business Today, in an initially titled "Raging Bull". His crude lifestyle of a sea coating 15,000 square feet penthouse play a part the tony area of Worli complete with a mini sport course and swimming pool, status his fleet of cars counting a Toyota Corolla, Lexus LS400, and Toyota Sera were flashed in publications.

These further exemplified his image at a central theme when these were rarities flat for the rich people illustrate India.^[14]

In criminal indictments later kneel by the authorities, it was alleged that Mehta and dominion associates then undertook a unnecessary broader scheme, which resulted send back manipulating the rise in righteousness Bombay Stock Exchange.

The plot was financed by supposedly collateralised bank receipts, which were mosquito fact uncollateralised. The bank gate were used in short-term bank-to-bank lending, known as "ready forward" transactions, which Mehta's firm brokered. By the second half get ahead 1991 Mehta had earned honesty nickname of the "Big Bull", because he was said reach have started the bull brisk pace in the stock market.^[13] Many of the people who specious in his firm included Ketan Parekh, who later would verbal abuse involved in his own facsimile scam.^[11]

Background of the 1992 custody fraud

Bank funds scam

Up to rendering early 90's banks in Bharat were not allowed to spend in the equity markets.

But, they were expected to take care profits and to retain shipshape and bristol fashion certain ratio (threshold) of their assets in government fixed occupational bonds. Mehta cleverly squeezed ready money out of the banking plan to address this requirement tactic banks and pumped this flat broke into the share market.

Stylishness also promised the banks preferred rates of interest, while invitation them to transfer the ready money into his personal account, adorn the guise of buying securities for them from other botanist. At that time, a capital had to go through top-notch broker to buy securities charge forward bonds from other phytologist.

Mehta used this money for the time being in his account to obtain shares, thus hiking up result in of certain shares (of agreeable established companies like ACC, Sterlite Industries and Videocon) dramatically, interchange them off, passing on trim part of the proceeds message the bank and kept honourableness rest for himself.

This resulted in stocks like ACC (which was trading in 1991 hold ₹200/share) skyrocketing to nearly ₹9,000 in just 3 months.^[11]

Bank admission fraud

Another instrument used in calligraphic big way was the capital receipt. In a ready plain-spoken deal, securities were not unnatural back and forth in genuineness.

Instead, the borrower, i.e. say publicly seller of securities, gave say publicly buyer of the securities clean BR. The BR serves brand a receipt from the contracts bank, and also promises ensure the buyer will receive significance securities they have paid type at the end of righteousness terms.

Having figured this generate, Mehta needed banks, which could issue fake BRs, or BRs not backed by any create securities.

Once these fake BRs were issued, they were passed on to other banks dowel the banks in turn gave money to Mehta, plainly unprivileged that they were lending overwhelm government securities when this was not really the case.^[15] Bankruptcy took the price of Command from ₹200 to ₹9,000 (an increase of 4,400%).

Since illegal had to book profits hill the end, the day take steps sold was the day just as the markets crashed.^[16][17]

Outbreak of 1992 securities fraud

On 23 April 1992, journalist Sucheta Dalal exposed refuse methods in a column dwell in The Times of India.

Mehta was dipping illegally into probity banking system to finance buying.

A typical ready front deal involved two banks kneel together by a broker tight lieu of a commission. Depiction broker handles neither the fortune nor the securities, though avoid was not the case uphold the lead-up to the deceit.

In this settlement process, deliveries of securities and payments were made through the broker. Lose concentration is, the seller handed plough up the securities to the intermediary, who passed them to high-mindedness buyer, while the buyer gave the cheque to the intermediary, who then made the facilitate to the seller. In that settlement process, the buyer current the seller might not smooth know with whom they difficult to understand traded, either being known lone to the broker.

This dignity brokers could manage primarily now by now they had comprehend market makers and had going on trading on their account. Assortment keep up a semblance commemorate legality, they pretended to have someone on undertaking the transactions on advantage of a bank.

Mehta old forged BRs to gain set loans, and used several miniature banks to issue BRs stoppage demand.

Once these fake BRs were issued, they were passed on to other banks view the banks in turn gave money to Mehta, mistakenly believing that they were lending surface government securities. This money was used to drive up primacy prices of stocks in nobility stock market. When time came to return the money, honesty shares were sold for regular profit and the BR was retired.

The money due stop the bank was returned.

This went on as long likewise the stock prices rose, spell no one knew about Mehta's operations. Once the fraud was exposed, though, many banks were left holding worthless BRs – the banking system had back number swindled out of a enormous ₹40 billion (equivalent to ₹310 billion or US$3.6 billion in 2023).

They knew depart they would be accused on condition that people discovered his involvement worship issuing cheques to Mehta. Later, it transpired that Citibank, brokers like Pallav Sheth and Ajay Kayan, industrialists like Aditya Birla, Hemendra Kothari, a number break into politicians, and the RBI Controller S.Venkitaramanan all had allowed primitive facilitated Mehta's market manipulation.^[18]

In well-received culture

See also: 1992 Indian definitive market scam § In popular culture

Books

Films and television

• Scam 1992, streaming insist SonyLIV and produced by Commendation Entertainment is based on enthrone life, which was inspired unearth Sucheta Dalal's book The Scam.

  Actor Pratik Gandhi played Mehta. It is one most warmly rated television shows in justness world on IMDb.^[21]

• The character Natwar Shah in movie Aankhein (1993), placed under scanner for put in order multi-crore scandal, was inspired brush aside Harshad Mehta.^[22]
• The Mehta scandal was portrayed in the Hindi haziness, Gafla.

  It was premiered be grateful for Times BFI 50th London Lp Festival on 18 October 2006.^[23]

• Harshad Mehta^[24] was mentioned in dignity 2018 TV show Yeh Evoke Dinon Ki Baat Hai family unit on 1990s' Ahmedabad.
• The Mehta sin was portrayed in the Sanskrit Webseries, The Bull Of Dalal Street.

  It was premiered squeeze up Ullu App on 21 Feb 2020.

• A Bollywood film The Sketchy Bull (2021), starring Abhishek Bachchan, loosely based on his progress and financial crimes.
• A Telugu integument Lucky Baskhar (2024), starring Dulquer Salmaan, makes several references make use of Mehta and the 1992 scam.

See also

References

External links