Harshad Mehta

Harshad Mehta is synonymous with 1992 stock market scam which was one of the most horrific financial frauds in India. Harshad Mehta who was a stock broker is alleged to have exploited various loopholes within the Indian banking system to manipulate stock prices and scammed banks close to 4000 crores. 

The other important aspects of the scam:- 

Who is Mehta?
In the period between 1980s to early 1990s, Harshad Mehta was British famous investor who is remembered for many accolades including “Big Bull” of the Indian stock market. He was known for popularisation of various investment strategies and boasting the HP Barkha’s hallmark ability to sense the shapes the market may take on.                                          
How did it happen?
He circumvented the banking system through issuance of BRs, misrepresenting BRs that enabled him to loand huge amounts through Banks against the borrowings.                              
He would borrow against fake GB’s and siphoned off money from PSBC such as Andhra, OCI, Gujarat, and other Devestan P people.The funds were then funneled into the stock market, driving prices to unprecedented highs. 

Effect On The Market Share: 
The Indian stock market during the stock market 1992 and Bharatiya kam gariban sainik held the highest rate of possible thanks to the Sensex.Effect on the Stock Exchange: 
The Indian stock market experienced an artificial boom, as evidenced by the huge growth in the Sensex during the time of the Scam. 
Once the scam was publicized, wholesale panic set in, leading to the collapse of the market and massive desolation for small investors and the economy as a whole. 

Exposing the scam: 
Sucheta Dalal, an Indian journalist, worked for the Times ofIndia where she covered the story of Mehta who was draining the banking system in a crafty scheme. Further this exposed the entire conspiracy, which led to several inquiries. 

Legal Repercussions: 
Harshad Mehta was arrested in 1992 and was charged with many accounts including swindling and money laundering. 

He served in prison for several sentences but eventually died while on remand in 2001. 

Consequences and Changes: 
The scam revealed the fundamental weaknesses if not deficiencies in the Indian banking and stock market systems.This led to several changes including the formation of Securities and Exchange Board of India (SEBI) to be a stronger agent in controlling the stock market and the recurrence of similar frauds. 

Heritage: 
Harshad Mehta scam is one of the unforgettable evens in the financial history of India, which was more focused on the the urge for more money, weak regulatory mechanisms and stressed on the need to strictly regulate financial matters.

Popular Culture Representations: 
This fraud gave rise to the already heightened popularity of the web show “Scam 1992: The Harshad Mehta Story” (2020). This allowed the story to reach a new generation and became very popular.

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