INTRODUCTION TO THE “BIG BULL OF THE TRADING FLOOR”. :
INTRODUCTION TO THE “BIG BULL OF THE TRADING FLOOR”.
The Great Indian Scam-1992 :
The Great Indian Scam-1992
Who is this man? :
Who is this man? HARSHAD MEHTA- story Started his career with New India Assurance Co. Quit his job in 1981 to become a sub-broker. Went bankrupt in 1982 & recovered soon to become more stronger. Went on to become one the most successful broker – The Rags to Riches Story, thereby earning the nick name of “THE BIG BULL”
What was the SCAM all about? :
What was the SCAM all about? Diversion of funds Use of Ready Forward (RF) to maintain SLR (Statutory Liquidity Ratio) Creative Accounting Intra-day Trading
He triggered a rise in the Bombay Stock Exchange in the year 1992 by trading in shares at a premium across many segments. Taking advantages of the loopholes in the banking system, Harshad and his associates triggered a securities scam diverting funds to the tune of Rs 4000 crore (Rs 40 billion) from the banks to stockbrokers between April 1991 to May 1992. Exploiting the loophole in the banking system
Mehta soon mastered the tricks of the trade by managing several brokers and set out on dangerous game plan. Mehta has siphoned off huge sums of money from several banks and millions of investors were conned in the process. His scam was exposed, the markets crashed and he was arrested and banned for life from trading in the stock markets. How it was done & role of the broker ?
He was later charged with 72 criminal offences. A Special Court also sentenced Sudhir Mehta, Harshad Mehta's brother, and six others, including four bank officials, to rigorous imprisonment (RI) ranging from 1 year to 10 years on the charge of duping State Bank of India to the tune of Rs 600 crore (Rs 6 billion) in connection with the securities scam that rocked the financial markets in 1992. He died in 2002 with many litigations still pending...