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What’s the Harshad Mehta scam, upon which on the social media, a new web series gets a lot of a buzz

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The web series, which was released on Sony Liv on October 9, has been waiting for a long time since its announcement. We are talking about ‘Scam 1992: The Harshad Mehta Story’, a web series based on Harshad Mehta’s real life. Whose story is from the 1980s and 90s Mumbai. It begins with the setup of Bombay in 1992, where a journalist tries to tell that there is a scam of 4000 crores from the bank. How big Harshad Mehta’s name and reputation must have been in those days we can be judged this by the fact that the journalist had been getting a lot of sweat before taking Harshad Mehta’s name. Scam 1992 follows the life of Harshad Mehta, a stockbroker who single-handedly raised the stock market, and then terribly declines because of his frauds.

1992 Harshad Mehta scam
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Mehta gets entry into the stock market when was he started a job at The New India Assurance Company. It was from here that his interest in the stock market grew and he quit his job and joined a brokerage firm in 1981. In 1984, he started his own company called Grow More Risers and Asset Management and took membership as a broker on the Bombay Stock Exchange. By 1990, Harshad Mehta had become a big name on the Indian stock market. It was assumed that whatever Harshad Mehta used to touch, it will become the gold. At that time he was also called ‘Amitabh Bachchan of Stock Market’ and ‘Big Bull’

How did he start cheating?

Taking advantage of the shortcomings of the banking system, Harshad Mehta started to cheat the banking transaction. Sucheta Dalal had told in her article at that time how this fraudulent work of Harshad Mehta works. Harshad Mehta used to raise funds from banks through Ready Forward (RF) deal. RF deal means short term loan. Banks take this type of loan when they need short term funds. This type of loan is for at least 15 days.

1992 Harshad Mehta scam
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In this, one bank pledges government bonds and lends to other banks. Banks can repurchase their bonds after refunding the amount. Banks do not transact government bonds in such transactions. Rather, banks used to issue receipts. It happens when the bank needs cash used to issue a receipt. It used to be like a bill. In return, banks give loans. This transaction between two banks was done through middlemen. Harshad Mehta was aware of the specifics of such transactions. Just what! Harshad Mehta took advantage of his identity and manipulated the money. Then by investing this money in the market, he made a tremendous profit.

During that time, the stock market was climbing every day. Some experts at that time also said that close and your eyes and put the money on any stock meant that you will get a profit. Harshad Mehta manipulated the market to take advantage of this boom.

Where did the money come from for the stock market?

Harshad Mehta wanted to make more profit by putting more and more money into the market. So he issued fake banking receipts. For this, he weaponized two small banks. Harshad Mehta used to get bank receipts by taking advantage of his good acquaintance with Bank of Karad and Metropolitan Co-operative Bank. He used to raise money in exchange for these receipts. With this, he used to return his money to banks by earning a profit on intraday. As long as the stock market kept climbing, nobody got a clue about it. But after the fall in the market, when he could not return the money of the banks within 15 days, his cheating was gets exposed. It was only after Harshad Mehta’s fraud was revealed that there was a lack of regulator for the stock market at that time. After this, market regulator SEBI was formed.

1992 Harshad Mehta scam
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In the 1990s, big investors were investing in Harshad Mehta’s company, but due to which Harshad Mehta’s name comes into the spotlight, was when he started investing his money in the stock market on the shares of ACC, ie Associated Cement Company. After Harshad Mehta’s ACC money, the fate of ACC changed as it was because the share of ACC was worth 200 rupees in the next few hours it became 9000 rupees. From Harshad Mehta’s 1550 square feet of a facing paint house to his hobby of expensive cars, everyone made him a celebrity. It was for the first time that a small broker is continuously investing so much and earning crores with every investment. Just this question transformed Harshad Mehta’s good days into bad days.

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In 1992, Harshad Mehta’s puzzle was exposed by the Times of India’s journalist Sucheta Dalal. Sucheta Dalal told that Harshad Mehta used to take a 15-day loan from the bank and put it in the stock market. Also, within 15 days he used to return the money with profit to the bank. But no one gives a loan for 15 days, but Harshad Mehta used to take a 15-day loan from the bank. Harshad Mehta would make a fake BR from one bank, after which he would get easy money from another bank too. However, after this was revealed, all the banks started asking for their money back from him. After the disclosure, Mehta was charged with 72 criminal charges, and a civil case was filed.

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However, despite all this, Harshad Mehta did not care, he started writing advisory columns in the newspapers that if you invest in this company, you will benefit or do not do it. Later, it was found that Mehta used to advise to invest only in the company in which his own money is employed.

At that time Ex-Prime Minister Narasimha Rao was accused of a scam

1992 Harshad Mehta scam
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In 1993, Harshad Mehta accused former Prime Minister and then Congress President PV Narasimha Rao of taking 1 crore bribe to save him from the case. He claimed that he had given a bribe to the PM in a suitcase. Harshad Mehta had revealed this in a conference and Ram Jethmalani was sitting with him in it. Harshad Mehta said that he had taken a suitcase with him to the Prime Minister’s residence. It had 67 lakh rupees. At the press conference, Mehta said that he gave the suitcase to Rao’s personal secretary Ram Khandekar. He did this at the behest of the Prime Minister. It was a matter of giving one crore, but by the morning of that day, I could arrange only 67 lakhs. Delivered the remaining amount on the second day Harshad said in that press conference that he had also told the Prime Minister how easy it is to earn money in the stock market. He said that by filing an affidavit, he has said to give money to the Prime Minister. However, the charge of taking bribes on PM could not be proved. But neither Harshad Mehta was convicted for the false accusation nor was Narasimha Rao charged for taking bribe. Narasimha Rao was alleged to have taken money from Harshad Mehta to spend in the Nandyal Lok Sabha by-election in Andhra. However, it was rejected outright by Congress.

The mysterious death of Harshad Mehta

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Harshad Mehta was facing many cases but he was convicted in only 1 case. The Supreme Court found him guilty and sentenced him to 5 years and a fine of Rs 25,000. Harshad Mehta was serving his sentence in Thane’s jail. On 31 December 2001, he complained of chest pain late at night after which he was admitted to Thane Civil Hospital where he died.


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Dhanraj is currently an undergraduate engineering student and a passionate writer. He is a die heart cricket and pro-wrestling fan as well as he is an automobiles enthusiast. He loves to share his views and opinions on sports, automobiles, and on new and upcoming technologies.