If you are reading this article then chances are that you have seen the series ‘Scam 1992 by SONY LIV‘ , and now you are curious about the Harshad Mehta Scam. Let’s dive in this article further and find out more about one of the Biggest Scams of india: the 1992 indian stock market Scam.
The Harshad Mehta Scam amount which comes to around ₹ 5000 crore was brought to light by a journalist named Sucheta Dalal. This was all at the end of Harshad Mehta’s glorious reign which named him as the “Amitabh Bacchan” of the stock market and the “Big Bull of the market Harshad Mehta”.
Let’s talk about the reality of the Harshad Mehta story, its beginning and how it affected his family, and end with current situations of the Mehta family.
The Harshad Mehta Story
Harshad Shanti Lal Mehta born on 29 july, 1954 at rajkot in a gujarati family was a middle class man, with humble beginning and background he was an ordinary man with extraordinary determination which unfortunately was also the reason for his downfall. He started as a jobber in the market, but he understood its working quite easily and rose to fame then started his own company named ”growmore research and asset management”.
He made several investments which gave exponential returns to him due to these investments he was considered a remarkable investor. He claimed that the indian market will remain bullish and under his tenure the bse jumped from just ₹1,300 to a whopping amount of ₹4,500 in just a year (now around 50,000).
He was famed as the “Amitabh Bacchan” of the stock market and people recognised him as the “Big Bull”. “Mehta che to maja che” was a very popular line for the infamous Big Bull Harshad Mehta
His downfall started when his determination to climb the ladder faster came as a curse. He started using the loopholes in the system for his personal use. He started manipulating stocks by illegally procuring funds from many reputed banks like sbi through using fake bank receipts. He noticed that money procured by the banks sat idle in the account, so he used that borrowed money to put in the stock market and fueled up the stock and before the expiration date of returning the money he took all the money out of the market leading the stock to crash and most new traders were majorly hit by this manipulation leading to them being go broke.
This was brought to light when a newspaper journalist named Sucheta Dalal printed about this Scam in her newspaper which was followed by a rigorous search in Mehta’s account and upon him found guilty, he was arrested and eventually died by a heart attack.
Harshad Mehta’s Family
After his demise in the year 2001 his family fought a number of legal cases for almost 27 years. In feb 2019 income tax finally removed the tax demand of rs 2.014 crores on the Harshad Mehta’s family.
Harshad Mehta’s wife, Jyoti Mehta won a legal battle for which the court ordered to pay 6 crores with 18% interest to jyoti Mehta.
Harshad Mehta’s brother, Ashwin Mehta completed his degree in law and practices in high court and supreme court.
Harshad Mehta’s son, Atur Harshad Mehta he is a businessman and is 42 years (as of 2022). Although not much is known about him as he doesn’t gives interviews and prefer to stay away from the limelight
SEBI Action After Harshad Mehta Scam
After the ‘Securities Scam’ or the ‘Harshad Mehta Scam’ a securities laws(amendments) act was passed in 1995, which widened the jurisdiction of the ‘securities exchange board of india’ or SEBI. It allowed SEBI to regulate depositories, fii’s venture capital funds and credit rating agencies. In short, Harshad Mehta’s Scam which was the 1992 indian stock market Scam allowed SEBI to get more powerful and protect retail investors.
SEBI changed the settlement cycle (the time within which brokers have to pay full money and take the delivery of stocks), from 14 days to just 2 days, SEBI is now hinting at a 1 day cycle soon.
Current Market Status
When Harshad Mehta started his career in the stock market bse or the ‘bombay stock exchange’ was merely at ₹1000 after nearly 30 years of the 1992 Scam bse is at its highest at ₹50,000 and the new ‘Big Bull’, Mr. Rakesh Jhunjhunwala expects it to grow even further.
After the Harshad Mehta Scam a new exchange was founded namely ‘nse’ (national stock exchange) to bring further transparency among investors and traders. Nse is currently at 14,000.
Now most trades are executed by the customers which eliminates the risk of execution when trades were placed by brokers. Earlier brokerage was around 1% of the total trade amount now there are no charges levied.
Like these there are many changes that took place after Sucheta Dalal’s apparent ‘eye opener article’
Harshad Mehta Car: Lexus
One of the most famous and cherished things that Harshad owned was the lexus ls 400. When he imported it, he was the only one in india to have such a high end car. He didn’t mind paying 45 lakhs for such treasure. The series by hansal Mehta namely Scam 1992 on sony liv made this car very popular among its fans.
It also suffered after the death of Harshad as it was auctioned off by the court to repay the debt amount which was purchased by raja dhody.
New Big Bull Of Indian Stock Market
Once a member of bear gang during Harshad Mehta’s reign, Rakesh Jhunjhunwala in Scam 1992 now is the new Big Bull of the market and like Harshad Mehta he is also very positive on the growth of indian stock market.
Many things changed after Harshad Mehta’s Scam in 1992, like the crown of ‘Big Bull’ being passed on to a bear at that time mr Rakesh Jhunjhunwala.
Harshad’s family started avoiding the limelight and making peace with the fact that Mehta is no longer with them.
The market realized that it needed more strict laws to be in place so that things like these didn’t happen again, so they gave more power and jurisdiction to SEBI.
The indian market is still growing and giving chances to many investors and traders out there to learn from the mistakes of Harshad Mehta and invest wisely.