Monetary rogues are the speak of the city in the meanwhile, and the newest addition is Rip-off 1992. This SonyLIV present is concerning the notorious financial fraud managed by Harshad Mehta, and it is based mostly on journalist Sucheta Dalal and Debashish Basu’s ebook The Rip-off: Who Gained, who Misplaced, who Acquired Away. It is 2020, and plenty of you may not keep in mind what occurred all the way in which again in 1992, so here is a refresher.
In 1992, a person named Harshad Mehta dedicated the most important stock market rip-off in India’s historical past, and it brought on our stock market to crash.
Whereas Harshad was nearly like a celeb stock dealer on the time of his arrest, the person’s origins had been truly fairly tame. He was not a superb pupil, and earlier labored quite a lot of odd jobs like promoting hosiery and cement.
Beginning in 1980, he started a decrease stage clerical job on the brokerage agency Harjivandas Nemidas Securities. This concerned gigs as a middle-man, and was not a place of a lot prominence. Nonetheless, he rose via the ranks, and by the 1990, he was often known as ‘The Amitabh Bachchan of the Stock market’. His flashy life-style included a sea going through 15,000 sq. ft penthouse in Worli with a mini golf course and swimming pool, together with a fleet of fancy vehicles.
Nonetheless, the cash truly got here from a fraud of over 1000 crores from the banking system of India to purchase stocks on the Bombay Stock Alternate.
Mehta obtained securities from SBI in opposition to solid cheques signed by corrupt officers and didn’t ship the securities. He made the costs of the stocks soar excessive via fictitious practices after which went on to promote the stocks that he owned in these corporations. This resulted within the lack of cash to lakhs of households, and in addition a pointy fall within the share costs. The index fell from 4500 to 2500 representing a lack of Rs. 100,000 crores in market capitalization.
The 1992 fraud concerned the Fairness Market rip-off the place Mehta invested in bubble stocks that misplaced value by over 95%. It additionally concerned the Prepared ahead deal rip-off (the place Mehta) acquired cheques issued in his title as an alternative of the bank and the Bank receipt rip-off (utilizing faux bank receipts).
Mehta took the price of ACC from ₹200 to ₹9000 in an especially quick span of time, which led to a 4400% enhance in a number of different stocks and as he bought the stocks, the market crashed.
On 23 April 1992, journalist Sucheta Dalal uncovered Mehta’s unlawful machinations through a newspaper article. The rip-off resulted within the largest plunge within the index the market had ever seen.
Many banks and people had been implicated, and the Supreme Courtroom convicted Mehta for his half on this monetary scandal valued at ₹49.99 billion. The rip-off resulted within the full restructuring of the Indian Monetary system to forestall additional scams. Harshad Mehta himself died in 2001 of a coronary heart assault whereas in custody, and he nonetheless had 28 instances pending in opposition to him.
And that is the story of India’s largest stock rip-off. Like a desi model of the Wolf of Wall Street!