Economic Fraud
Revisiting the Harshad Mehta Stock Market Scam: Latest Updates
The Harshad Mehta Scam, one of India’s most infamous financial frauds, shook the stock market in the early 1990s. The fraudulent amount involved was approximately Rs 4,000 crores. The scam unfolded primarily in Mumbai, the financial capital of India.
THE SCAMMER : The mastermind behind the scam was Harshad Mehta, often referred to as the “Big Bull” of Dalal Street. He, along with his associates, orchestrated a massive securities scam that exploited loopholes in the banking system to siphon off funds and manipulate stock prices.
MODUS OPERANDI: Harshad Mehta manipulated the banking system by obtaining unsecured loans and diverting them to the stock market. He used fake bank receipts to get these loans, inflating the prices of certain stocks, and then selling them at a profit.
CURRENT LEGAL STATUS: Harshad Mehta was arrested in 1992 and died in 2001 while in custody. Several cases against his associates continue.
PREVENTIVE MEASURES: Stronger regulatory oversight, stricter enforcement of banking laws, and transparent financial auditing could have potentially prevented this scam.
The Harshad Mehta Scam remains a stark reminder of the need for vigilance in financial systems.