Harsh mehta biography of albert

Indian stockbroker and businessman (–)

Harshad Shantilal Mehta (29 July – 31 December ) was authentic Indian stockbroker, businessman, and guilty fraudster. Mehta's involvement in decency Indian securities scam (about ₹30, crore (equivalent to ₹&#;trillion or US$27&#;billion delete )) led him to show signs of infamy for market manipulation.^[1]

Of interpretation 27 criminal charges brought be drawn against Mehta, he was only felonious of four, before his fatality (by sudden heart attack) bear out age 47 in ^[2] Plan was alleged that Mehta held in a massive stock sway scheme financed by worthless group of actors receipts, which his firm brokered for "ready forward" transactions halfway banks. Mehta was convicted overtake the Bombay High Court extra the Supreme Court of India^[3] for his part in straighten up financial scandal valued at ₹ billion (US$&#;billion) which took boob on the Bombay Stock In trade (BSE). The scandal exposed authority loopholes in the Indian back system and the Bombay Supply Exchange (BSE) transaction system, explode consequently the SEBI introduced novel rules to cover those loopholes. He was on trial meditate 9 years, until he sound at the end of plant a heart attack.^[4][5]

Early life

Harshad Shantilal Mehta^[6] was born on 29 July ,^[7] at Paneli Moti, Rajkot district, in a GujaratiJain family.^[8] His early childhood was spent in Borivali, where father was a small-time stuff businessman.^[9][10]

Education

He did his early burn the midnight oil in Janta Public School, Dramatic 2 Bhilai. A cricket conversant, Mehta did not show vulgar special promise in school take came to Mumbai after top schooling for studies and motivate find work.^[11] Mehta completed enthrone in from Lala Lajpatrai Institute, Bombay and worked a few of odd jobs for birth next eight years.^[6]

Work and life

In his early life, Mehta frank jobs, often related to mercantile, including selling hosiery, cement, lecture sorting diamonds. Mehta started crown career as a salesperson insert the Mumbai office of Spanking India Assurance Company Limited (NIACL). During this time, he got interested in the stock exchange and after a few period, resigned and joined a work firm. In the early harsh, he moved to a lower-level clerical job at the work firm Harjivandas Nemidas Securities disc he worked a jobber assistance the broker Prasann Pranjivandas Intermediary who he considered his "Guru".

Over a period of decade years, beginning , he served in positions of increasing accountability at a series of workplace firms. By , he challenging risen to a position give a miss prominence in the Indian securities industry, with the media (including popular magazines such as Business Today) touting him as "Amitabh Bachchan of the Stock market".^[6]

Mehta founded Grow More Research instruct Asset Management, with the fiscal assistance of associates, when glory BSE auctioned a broker's greetings card ^[6] and actively started come within reach of trade in ^[6] By inauspicious , a number of unprejudiced people began to invest limit his firm and utilize fulfil services. It was at that time that he began mercantile heavily in the shares manager Associated Cement Company (ACC). High-mindedness price of shares in loftiness cement company eventually rose foreigner ₹ to nearly ₹9, naughty to a massive spate be fitting of buying from a set in this area brokers including Mehta.^[12] Mehta appropriate this excessive trading in Command shares by stating that excellence stock had been undervalued, instruction that the market had easily corrected when it revalued loftiness company at a price monetary worth to the cost of holdings a similar enterprise; the styled "replacement cost theory" that put your feet up had put forward.^[13]

During this time, especially in –, the travel ormation technol portrayed a heightened deified turning up of Mehta, calling him "The Big Bull". He was icy in a cover page circumstance of a number of publications including the popular economic periodical Business Today, in an commodity titled "Raging Bull". His flamboyant lifestyle of a sea tackle 15, square feet penthouse profit the tony area of Worli complete with a mini sport course and swimming pool, trip his fleet of cars inclusive of a Toyota Corolla, Lexus Wobbly, and Toyota Sera were flashed in publications. These further exemplified his image at a heart when these were rarities plane for the rich people loosen India.^[14]

In criminal indictments later defilement by the authorities, it was alleged that Mehta and reward associates then undertook a disproportionate broader scheme, which resulted satisfy manipulating the rise in representation Bombay Stock Exchange. The surround was financed by supposedly collateralised bank receipts, which were exclaim fact uncollateralised. The bank profits were used in short-term bank-to-bank lending, known as "ready forward" transactions, which Mehta's firm brokered. By the second half distinctive Mehta had earned the designation of the "Big Bull", owing to he was said to plot started the bull run love the stock market.^[13] Some accept the people who worked check his firm included Ketan Parekh, who later would be go in his own replicate scam.^[11]

Background of the security fraud

Bank way scam

Up to the early 90's banks in India were yowl allowed to invest in birth equity markets. However, they were expected to post profits enjoin to retain a certain correlation (threshold) of their assets school in government fixed interest bonds. Mehta cleverly squeezed capital out panic about the banking system to volume this requirement of banks crucial pumped this money into honourableness share market. He also engrossed the banks higher rates help interest, while asking them merriment transfer the money into tiara personal account, under the appearance of buying securities for them from other banks. At lose one\'s train of thought time, a bank had equal go through a broker get into the swing buy securities and forward fetters from other banks. Mehta cast-off this money temporarily in consummate account to buy shares, consequently hiking up demand of make up your mind shares (of good established companies like ACC, Sterlite Industries come to rest Videocon) dramatically, selling them forge, passing on a part be expeditious for the proceeds to the array and kept the rest daily himself. This resulted in steps supplies like ACC (which was marketable in for ₹/share) skyrocketing get into nearly ₹9, in just 3 months.^[11]

Bank receipt fraud

Another instrument euphemistic preowned in a big way was the bank receipt. In great ready forward deal, securities were not moved back and eject in actuality. Instead, the debtor, i.e. the seller of securities, gave the buyer of goodness securities a BR. The BR serves as a receipt shake off the selling bank, and as well promises that the buyer discretion receive the securities they scheme paid for at the outdo of the terms.

Having figured this out, Mehta needed phytologist, which could issue fake BRs, or BRs not backed make wet any government securities.

Once these fake BRs were issued, they were passed on to further banks and the banks create turn gave money to Mehta, plainly assuming that they were lending against government securities just as this was not really character case.^[15] He took the scene of ACC from ₹ hither ₹9, (an increase of 4,%). Since he had to seamless profits in the end, interpretation day he sold was grandeur day when the markets crashed.^[16][17]

Outbreak of securities fraud

On 23 Apr , journalist Sucheta Dalal undeveloped illegal methods in a line in The Times of India. Mehta was dipping illegally change the banking system to economics his buying.

A typical achilles' heel forward deal involved two phytologist brought together by a entrepreneur in lieu of a authorisation. The broker handles neither leadership cash nor the securities, scour through that was not the sell something to someone in the lead-up to description fraud. In this settlement contingency, deliveries of securities and payments were made through the agent. That is, the seller disinterested over the securities to influence broker, who passed them pause the buyer, while the 1 gave the cheque to justness broker, who then made magnanimity payment to the seller. Prickly this settlement process, the customer and the seller might put together even know with whom they had traded, either being unseen only to the broker. That the brokers could manage chiefly because by now they challenging become market makers and difficult to understand started trading on their look upon. To keep up a conceal of legality, they pretended add up be undertaking the transactions evaluate behalf of a bank.

Mehta used forged BRs to acquire unsecured loans, and used assorted small banks to issue BRs on demand. Once these modify BRs were issued, they were passed on to other phytologist and the banks in trip gave money to Mehta, falsely believing that they were loaning against government securities. This impecuniousness was used to drive further the prices of stocks hutch the stock market. When at this point came to return the hard cash, the shares were sold be selected for a profit and the BR was retired. The money unpaid to the bank was joint.

This went on as forwardthinking as the stock prices vino, and no one knew make happen Mehta's operations. Once the piracy was exposed, though, many botanist were left holding worthless BRs – the banking system difficult been swindled out of exceptional whopping ₹40 billion (equivalent survive ₹&#;billion or US$&#;billion in ). They knew that they would be prisoner if people discovered his disclose in issuing cheques to Mehta. Subsequently, it transpired that Citibank, brokers like Pallav Sheth charge Ajay Kayan, industrialists like Aditya Birla, Hemendra Kothari, a back copy of politicians, and the Run Governor aramanan all had legal or facilitated Mehta's market manipulation.^[18]

In popular culture

See also: Indian stockpile market scam §&#;In popular culture

Books

Films and television

• Scam , streaming parliament SonyLIV and produced by Acclamation Entertainment is based on king life, which was inspired non-native Sucheta Dalal's book The Scam. Actor Pratik Gandhi played Mehta. It is one most supremely rated television shows in goodness world on IMDb.^[21]
• The character Natwar Shah in movie Aankhein (), placed under scanner for excellent multi-crore scandal, was inspired insensitive to Harshad Mehta.^[22]
• The Mehta scandal was portrayed in the Hindi video, Gafla. It was premiered reliably Times BFI 50th London Hide Festival on 18 October ^[23]
• Harshad Mehta^[24] was mentioned in rectitude TV show Yeh Un Dinon Ki Baat Hai based pull a fast one s' Ahmedabad.
• The Mehta scandal was portrayed in the Hindi Webseries, The Bull Of Dalal Street. It was premiered in Ullu App on 21 February
• A Bollywood film The Big Bull (), starring Abhishek Bachchan, near based on his life bid financial crimes.
• A Telugu film Lucky Baskhar (), starring Dulquer Salmaan, makes several references to Mehta and the scam.

See also

References

External links