1. Who Was Harshad Mehta?
Harshad Mehta was a well-known stockbroker, alleged to have manipulated the stock market in 1992 by drawing funds from banks fraudulently with worthless bank receipts and subsequently using this liquidity to buy huge amounts of shares at a premium across many industry verticals.
2. What Was The Securities Scam?
The securities scam of 1991-92 refers to a diversion of bank funds worth Rs 3,500 crore to a group of stockbrokers, led by Harshad Mehta. These funds were then put into the stock market selectively, causing it to surge to over 4,500 points. It was first exposed by veteran journalist Sucheta Dalal in April 1992.
3. How Was He Exposed?
Mehta’s illicit methods were exposed on 23 April 1992, when Sucheta Dalal wrote an article in The Times of India detailing the loopholes in the banking system that had been exploited by the stock broker. She got the tip-off after she saw him pull up at the State Bank of India offices in a brand new Toyota Lexus, which had just been released internationally and costed more than Rs 40 lakh at the time.
4. What Happened to Harshad Mehta?
Harshad Mehta was arrested by the Central Bureau of Investigation (CBI) in November 1992, along with his brothers Ashwin and Sudhir, who masterminded and executed this scam together.
6. He secured bail in all cases, including the MUL conviction, but was arrested again in 2001 for misappropriating Rs 2.5 billion from 2.7 million “missing shares” of 90 blue-chip companies. He was denied bail this time, and on 31 December 2001, at the age of 47, he passed away in Tihar jail after a heart attack.
7. What Was the Extent of the Scam, and What Is its Status Today?
Following the scam, the Reserve Bank of India had appointed the Janakiraman Committee to probe it. In its first report, the committee quantified the scam amount at Rs 4,300 crore involving units of the Unit Trust of India (UTI). Adjusted for inflation, this amount stands at over Rs 24,000 crore today.
8. Upcoming Web Series On Harshad Mehta Story
Scam 1992 is the web series that is made by the renowned filmmaker Hanshal Mehta. The series teaser is live on YouTube, and it will be streaming soon on the OTT platform SonyLiv.