The greed for money led to India’s biggest stock market scam of 1992 when Harshad Mehta, also known as the Big Bull of Dalal Street, deceived the entire nation of Rs 4,000 cr. Here are 10 facts about him.
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Fact No. 1: Came to Mumbai dirt poor
Born in a lower-middle-class family, in Paneli Moti, Rajkot, Harshad Mehta came to Mumbai in search of a living. At the time, the Big Bull of Dalal street had only Rs 40 in his pockets. To survive in the city of dreams, he took meagre jobs for the next 8 yrs.
Fact No. 2: Became the “Big B” of the stock market
By the 1990s, Harshad Mehta had risen to such prominence in the share market with his relentless hard work and unwavering will, that he earned the title ‘Amitabh Bachchan of the stock market’.
Fact No. 3: The most treasured man of the Income Tax department
In 1992, Harshad Mehta paid the highest income tax of Rs 24 cr, just a few weeks before the scam was exposed. In fact, some said that if he was alive and not caught, Harshad Mehta would have been richer than Mr Mukesh Ambani.
Fact No. 4: Lived life king size
He owned a 12,000 sq. ft. lavish penthouse in Worli and a fleet of rare, luxurious cars like the Lexus Starlet and Toyota Corolla. Many people only dreamt of owning these in the 1990s.
Fact No. 5: Orchestrated India’s biggest scam ever
Between April 1991 and 1992, Mehta manipulated Sensex in a way that it surged from just over 1,000 points to almost 4,500 points. This resulted in a huge scam of Rs 4,000 cr, which made it the biggest in India that was planned just by a single person. When adjusted for inflation, the scam would amount to Rs 24,000 cr.
Fact No. 6: Got a staggering surge in market value
In this scam, Rs 3,500 cr of funds from the banks were diverted to a group of stockbrokers, led by Harshad Mehta. These funds were then put into selective stocks, causing them to surge over a staggering 4,500 per cent.
Fact No. 7: The biggest stock market scam exposed
Journalist Sucheta Dalal exposed the scam on 23rd Apr 1992 in the columns of the Times of India. Based on the scam, she co-wrote a book titled “The Scam: Who Won, Who Lost, Who Got Away” with Debashish Basu.
Fact No. 8: Poor banking system
Thanks to the scandal, loopholes in the Indian banking system and the Bombay Stock Exchange (BSE) transaction system were exposed. Watchdog SEBI further introduced new rules to address the loopholes. Mehta was on trial for 9 yrs until he passed away in late 2001 due to a cardiac arrest in Tihar jail.
Fact No. 9: Allegation against Prime Minister
On 16th Jun 1993, when Mehta was out on bail, he publicly claimed that he had bribed the then Congress President and Prime Minister Mr P. V. Narasimha Rao of Rs 1 cr for getting Mehta out of the scandal case.
Fact No. 10: Case magnitude
The CBI charged Mehta with 72 criminal cases, which included bribery, cheating, forgery, criminal conspiracy and falsification of accounts. He was also charged with over 600 civil action suits by banks and institutions regarding the money he owed them. Mehta had fooled 4 banks of an amount of Rs 1,700 cr.
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