Harshad Shantilal Mehta (29 July 1954–31 December 2001) was known as a tricky stockbroker. He had several criminal charges that made him an exciting figure during his youth. However, he was only convicted of 4 out of 27 criminal charges. The Supreme Court of India and Bombay High Court convicted him on suspicion of a 100 billion scandal at the Bombay Stock Exchange. This creates a new way for updated laws and codes.
Past Life and Education
Shantilal Mehta, a small textile business owner, and Rasilaben Mehta, a housewife, gave birth to the tricky stockbroker on July 29th, 1954 in Paneli Moti, Rajkot, Gujarat.Harshad Mehta also has three siblings, namely Sudhir Mehta, Ashwin Mehta, and Hitesh Mehta. He was very fond of cricket in his early childhood.After completing his schooling, Mehta arrived in Mumbai. From there, he moved to Lala Lajpat Rai College to pursue a B.Com. From 1976 to 1984, he worked for various ordinary organizations.
Work and Life In Stock Market
Harshad Mehta In his first office, New India Assurance Company Limited, he worked as a salesperson in Mumbai.This was the first time he felt some sort of interest in the stock market. But, after some time, he joined a new brokerage firm.
This went on the same way for ten years. In 1990, he was recognised as the “Amitabh Bachchan of the Stock Market” by Business Today magazine. That was the time when he achieved some prominence in the industry.
Mehta started his active participation in the stock market in 1986 by buying the Associated Cement Company shares. He hiked the price from 200 to 9,000, which he explained with the “replacement cost theory.” He articulated that the shares were undervalued, which got hiked with the company’s revaluation.
The media started to recognise him as “The Big Bull”. Mehta has been seen on the cover page of various publications, like Business Today. The magazine created an article titled “Raging Bull” with the specifications of his 15,000 square foot penthouse, a mini-golf course, a fleet of cars like the Toyota Sera and Lexus LS400, and his swimming pool.
However, this did not go far as the man had been put in charge of manipulating the rise of the Bombay Stock Exchange.
The Background of the 1992 Security Fraud
Stamp Paper Fraud:
Mehta reportedly made capital against the banking system and used the money to buy shares. That increased the values of some shares, like Sterlite Industries, Videocon, and ACC. While giving a certain portion to the bank, he kept the rest for himself. This activity hiked the demand for ACC share from 200 to 9,000 in just 3 months.
Bank Receipt Fraud
Banks used to provide a security receipt from the seller to the buyer as a BR. The BR ensures that the buyer will get the securities once the terms are met successfully. Mehta decided to use fake BRs to receive security in monetary terms. This shook the entire market in a day.
Security fraud
In the same year, 1992, a journalist named Sucheta Dalal prepared a column to expose Mehta’s illegal involvement in the Indian banking system. That time, the buyer and seller, without knowing each other, just trust the broker and compensate for everything involved in the settlement process. That means the seller gave securities to the broker, who handed them over to the buyer; then, the buyer gave the cheque to the broker; and finally, the broker made payment to the seller.
This way, the real seller and buyer would be hidden behind the broker. Mehta took this opportunity to receive unsecured loans from forged BRs. The fake BRs, once issued, were moved to other banks from where Mehta got his money. Once the BR had retired, the shares were put on sale at a profitable rate, and this would be done only when the period for returning the amount arrived. This way, the amount gets easily returned and Mehta secures his operation in secret.
How he was exposed
Sucheta Dalal, a journalist, author, and the editor of the Times of India until 1998, exposed Harshad Mehta’s lavish lifestyle. She was the first to identify and mention Mehta’s fraud of over 500 crore missing from the SBI subsidiary general ledger (SGL) in the Times of India column, and this began Mehta’s decline.
Found guilty and arrested
The CBI arrested Mehta and his brother in November 1992 for 72 criminal offences and the expropriation of more than 2.8 million shares of various companies. he was granted bail after three months of arrest with the help of a lawyer he hired, Ram Jethmalani.
But 7 years later, in 1999, he was again convicted by the Bombay high court for 5 years. While serving his 5 year jail sentence, Harshad Mehta died on December 31, 2001, at the age of 47 because of a heart attack.
Films and Shows Based on
- The Big Bull
- The Bull of Dalal Street
- Yeh Un Dinon ki Baat Hai
- Gafia
- Aankhein
- Scam 1992
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