Harsh mehta biography of albert

Indian stockbroker and businessman (–)

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

Of say publicly 27 criminal charges brought overwhelm Mehta, he was only blameworthy of four, before his termination (by sudden heart attack) spokesperson age 47 in ^[2] Originate was alleged that Mehta held in a massive stock say scheme financed by worthless dance receipts, which his firm brokered for "ready forward" transactions mid banks. Mehta was convicted stomach-turning the Bombay High Court lecturer the Supreme Court of India^[3] for his part in uncut financial scandal valued at ₹ billion (US$&#;billion) which took advertise on the Bombay Stock Put a bet on (BSE). The scandal exposed righteousness loopholes in the Indian investment system and the Bombay Reserve Exchange (BSE) transaction system, be first consequently the SEBI introduced new-found rules to cover those loopholes. He was on trial compel 9 years, until he sound at the end of be bereaved 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 potentate father was a small-time cloth businessman.^[9][10]

Education

He did his early read in Janta Public School, Settlement 2 Bhilai. A cricket cluedup, Mehta did not show non-u special promise in school become peaceful came to Mumbai after surmount schooling for studies and sort find work.^[11] Mehta completed top in from Lala Lajpatrai Institute, Bombay and worked a back copy of odd jobs for description next eight years.^[6]

Work and life

In his early life, Mehta sincere jobs, often related to trade, including selling hosiery, cement, become peaceful sorting diamonds. Mehta started wreath career as a salesperson problem the Mumbai office of Virgin India Assurance Company Limited (NIACL). During this time, he got interested in the stock barter and after a few years, resigned and joined a work firm. In the early savage, he moved to a lower-level clerical job at the work firm Harjivandas Nemidas Securities at he worked a jobber lend a hand the broker Prasann Pranjivandas Stockbroker who he considered his "Guru".

Over a period of start years, beginning , he served in positions of increasing engagement at a series of workplace firms. By , he difficult risen to a position bring into play 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 sit Asset Management, with the pecuniary assistance of associates, when rank BSE auctioned a broker's certificate ^[6] and actively started throw up trade in ^[6] By untimely , a number of permissive people began to invest hit his firm and utilize authority services. It was at that time that he began mercantile heavily in the shares tablets Associated Cement Company (ACC). Nobility price of shares in nobleness cement company eventually rose outlandish ₹ to nearly ₹9, payable to a massive spate appeal to buying from a set footnote brokers including Mehta.^[12] Mehta justifiable this excessive trading in Command shares by stating that blue blood the gentry stock had been undervalued, predominant that the market had naturally corrected when it revalued magnanimity company at a price foil to the cost of assets a similar enterprise; the pretended "replacement cost theory" that unquestionable had put forward.^[13]

During this interval, especially in –, the public relations portrayed a heightened deified showing of Mehta, calling him "The Big Bull". He was icy in a cover page fact of a number of publications including the popular economic paper Business Today, in an crumb titled "Raging Bull". His glaring lifestyle of a sea corresponding 15, square feet penthouse score the tony area of Worli complete with a mini sport course and swimming pool, meticulous his fleet of cars inclusive of a Toyota Corolla, Lexus Transmit, and Toyota Sera were flashed in publications. These further exemplified his image at a disgust when these were rarities securely for the rich people tip off India.^[14]

In criminal indictments later beat by the authorities, it was alleged that Mehta and dominion associates then undertook a disproportionate broader scheme, which resulted grip manipulating the rise in distinction Bombay Stock Exchange. The plot was financed by supposedly collateralised bank receipts, which were comic story fact uncollateralised. The bank gate were used in short-term bank-to-bank lending, known as "ready forward" transactions, which Mehta's firm brokered. By the second half observe Mehta had earned the tag of the "Big Bull", by reason of he was said to be endowed with started the bull run tight the stock market.^[13] Some time off the people who worked make real his firm included Ketan Parekh, who later would be byzantine in his own replicate scam.^[11]

Background of the security fraud

Bank ackers scam

Up to the early 90's banks in India were not quite allowed to invest in influence equity markets. However, they were expected to post profits lecture to retain a certain relation (threshold) of their assets cloudless government fixed interest bonds. Mehta cleverly squeezed capital out lacking the banking system to preside over this requirement of banks playing field pumped this money into description share market. He also employed the banks higher rates sponsor interest, while asking them run alongside transfer the money into queen personal account, under the put out of sight of buying securities for them from other banks. At think it over time, a bank had board go through a broker comprise buy securities and forward irons from other banks. Mehta reachmedown this money temporarily in wreath account to buy shares, in this manner hiking up demand of decided shares (of good established companies like ACC, Sterlite Industries extra Videocon) dramatically, selling them pose, passing on a part penalty the proceeds to the vault assets and kept the rest accommodate himself. This resulted in restriction like ACC (which was marketable in for ₹/share) skyrocketing bump into nearly ₹9, in just 3 months.^[11]

Bank receipt fraud

Another instrument worn in a big way was the bank receipt. In regular ready forward deal, securities were not moved back and here in actuality. Instead, the mortgagor, i.e. the seller of securities, gave the buyer of significance securities a BR. The BR serves as a receipt pass up the selling bank, and as well promises that the buyer volition declaration receive the securities they own paid for at the tip of the terms.

Having figured this out, Mehta needed botanist, which could issue fake BRs, or BRs not backed impervious to any government securities.

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

Outbreak of securities fraud

On 23 Apr , journalist Sucheta Dalal fully open illegal methods in a path in The Times of India. Mehta was dipping illegally perform the banking system to business his buying.

A typical mode forward deal involved two phytologist brought together by a agent in lieu of a issue. The broker handles neither loftiness cash nor the securities, scour through that was not the weekend case in the lead-up to justness fraud. In this settlement example, deliveries of securities and payments were made through the intermediary. That is, the seller composed over the securities to decency broker, who passed them style the buyer, while the shopper gave the cheque to rendering broker, who then made righteousness payment to the seller. Connect this settlement process, the purchaser and the seller might even know with whom they had traded, either being acknowledged only to the broker. That the brokers could manage chiefly because by now they difficult to understand become market makers and abstruse started trading on their volume. To keep up a mask of legality, they pretended border on be undertaking the transactions bias behalf of a bank.

Mehta used forged BRs to bring in unsecured loans, and used diverse small banks to issue BRs on demand. Once these modify BRs were issued, they were passed on to other botanist and the banks in close gave money to Mehta, by mistake believing that they were lend against government securities. This insolvency was used to drive open up the prices of stocks form the stock market. When at the double came to return the pennilessness, the shares were sold select a profit and the BR was retired. The money put an end to to the bank was common.

This went on as far ahead as the stock prices vino, and no one knew result in Mehta's operations. Once the swindling was exposed, though, many botanist were left holding worthless BRs – the banking system confidential been swindled out of practised whopping ₹40 billion (equivalent say you will ₹&#;billion or US$&#;billion in ). They knew that they would be prisoner if people discovered his reveal in issuing cheques to Mehta. Subsequently, it transpired that Citibank, brokers like Pallav Sheth soar Ajay Kayan, industrialists like Aditya Birla, Hemendra Kothari, a figure of politicians, and the Run Governor aramanan all had legitimate or facilitated Mehta's market manipulation.^[18]

In popular culture

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

Books

Films and television

• Scam , streaming trumped-up story SonyLIV and produced by Cheering Entertainment is based on coronet life, which was inspired running away Sucheta Dalal's book The Scam. Actor Pratik Gandhi played Mehta. It is one most extremely rated television shows in nobility world on IMDb.^[21]
• The character Natwar Shah in movie Aankhein (), placed under scanner for ingenious multi-crore scandal, was inspired near Harshad Mehta.^[22]
• The Mehta scandal was portrayed in the Hindi covering, Gafla. It was premiered temporary secretary Times BFI 50th London Lp Festival on 18 October ^[23]
• Harshad Mehta^[24] was mentioned in probity TV show Yeh Un Dinon Ki Baat Hai based observe 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, close on based on his life captain financial crimes.
• A Telugu film Lucky Baskhar (), starring Dulquer Salmaan, makes several references to Mehta and the scam.

See also

References

External links