Scam Review 1992: The Harshad Mehta Scam Story

  

Scam Review 1992: The Harshad Mehta Scam Story










The Harshad Mehta Scam is now trending again, and in this blog, we will be talking about a review of the 1992 Scam web series, which is broadcast on SonyLiv. This web series is based on the book, Scam written by Sucheta Dalal and Debashis Basu. In the Scam web series 1992 the role of Harshad Mehta, also known as Big Bull is played by Pratik Gandhi whose role has been remarkable throughout the series, with Sucheta Dalal starring Shreya Dhanwanthary. With the 1992 scam, a major scam in the Indian stock market was uncovered.

Let’s unveil the Harshad Mehta Fraud.


In the early days, the financial situation of the Mehta Harshad family was not so good. As a result, he began taking on many smaller responsibilities. His dream was to become rich in a very short time. And these small jobs did not help Harshad get rich. So he kept looking for opportunities to get rich quick. In time, he met some of his acquaintances who were wealthy and made a fortune by investing in the stock market. This made him very interested, so he decided to enter the stock market.

Initially, he started working with other stockbrokers and became a stockbroker himself. While working there, Harshad Mehta became acquainted with the name Insider Trading and heard that people were making a lot of money through this investment, and they were getting rich. Finding this as his best opportunity, he also started doing Insider Trading. Any information that affects a company's price is called internal information.

scam 1992

Information that could affect the value of a company's shares is provided in stock and this information is passed on to the public. For example, if a company receives a major contract or that company will enter into a major contract with another company, which could affect the price of the company's shares, this information will first go to the stock market, and then this information will be passed on. in public. But sometimes, such information is rewarding before it reaches the stock market. Many people use this knowledge to take advantage of stocks. For example, when people like Harshad Mehta get inside company information and when they see the growth in that company, then he, with inside knowledge buys company shares before the information reaches the stock market. Once the information has reached the market, it is passed on to the public and appropriately the public begins to buy shares, which has led to an increase in stock prices. After rising stock prices, Harshad Mehta used to sell stocks and used to book his profits. Therefore, through this internal trade, Harshad Mehta succeeded in making a lot of money.

HUMANITY IS DANGEROUS-

Harshad Mehta wanted more. He did not want to give up the money he had. He began to find more ways to get rich. Harshad Mehta found that there are many people who cheat the stock price in the stock market, increase or decrease the stock price and as a result, these people are called operators. With this, Harshad Mehta began cheating stocks and became an Operator himself. In the stock app, the Pump and Dump system is usually used.

In the pumping and dumping system, operators like Harshad Mehta first invest their stock in stock 1 or 2 and then tell people to do so by telling them that the price of that share will go up. Many of the people involved in the Hashad Mehta exploitation, began to invest in these stocks, and as the stock price rose, he made a good profit. Over time, Harshad Mehta through his company, Growmore Research used to increase the price of shares in many companies, and in return, he took a commission from them. By exploiting the shares, Harshad Mehta initially invested in Growmore Research investors, but as the demand for money grew he reached out to banks. This was because banks and government agencies often had large sums of money in them. Harshad knew that if he spent that much money, he could make good money. Thus, he succeeded in finding a way to use the banks' money to control stock prices.

harshadmehta

In many cases, the government needs money to meet its expenses and this government raises money through government bonds. Usually, the government, through government bonds, borrows money from large institutions. Many banks have been told to invest in government securities, which are mandatory for some. So if a bank sometimes feels the need to take out a temporary loan and lend the government securities to another bank. This process is called RF Deal or Ready Forward Deal. So in this RF agreement process, two banks are involved one bank being the lender and the other bank the lender, and in these banks, two things involved one was money and the other was a bank receipt.

Let's clear this up for an example. For example, if Punjab National Bank wants a temporary loan from the State Bank of India through this RF agreement, it will transfer the money to the SBI and in return, the SBI will provide them with a bank receipt. The bank receipt here will mean that SBI has successfully secured securities from Punjab National Bank, and successfully secured the money from it. The work of the Ready Forward Deal used to happen on a very large scale, as a result of which a healthy relationship developed between banks and traders. These brokers have played a role in mediating between lending and lending banks. They often gained a lot of trust from the banks, which sometimes the lending banks would transfer the loan amount directly to the seller and the seller would usually transfer it to the loan bank and then transfer the bank receipt from the borrower to the lending banks.

THIS IS A BEAUTY TAKEN BY HARSHAD MEHTA !!

Harshad Mehta Fraud Starts:

Harshad began to trust the banks, and whenever there was a Ready Forward Deal, he would often withdraw money from his account, and use that money in the stock market to control the stock price. When a bank frequently requested a bank receipt, Harshad often issued a fake receipt or sometimes delayed the receipt process. He used to spend bank money on the stock market for a few days, and after a few days, he often returned the money to them. The program worked well, as the market grew and so did the Harshad Mehtas package.

As the market began to decline, this had a significant impact on Harshad, as corporate stock prices also plummeted where Harshad had invested. As a result, he found it very difficult to repay the loan. So while using the money of banks in the stock market, Harshad Mehta suffered a lot of losses as the market was down. As a result he started going to various banks to get a RF Deal repaying a temporary loan, and taking his money used to clear his previous debts. But as they say "when a bad time comes it kicks us hard", and this is what first happened to him.

Now, as the stock market begins to decline sharply, the loss of Harshad Mehta is increasing sharply in the stock market. The collapse of the stock market in 1992 had a devastating effect on the stock market. This led to his failure to clear his debt to various banks, and as a result, the SKAM came out on top. Many state-owned banks face losses, and ordinary people indirectly suffer losses.

By defrauding stock prices, Harshad Mehta made a lot of money. He was once the chief taxpayer of India's Advance Tax. With this extra money, Harshad Mehta bought more luxury cars, bigger bungalows. There were many operators at the time and who often cheated on stock prices, but Harshad Mehta came out as the biggest among them. In this stock market scam, many politicians, and many executives, have also been involved with Harshad Mehta, but have succeeded in saving themselves from this scam when it comes to the fore. After Harshad Mehta, an employee of his company, Ketan Parekh also committed a major stock market scandal in India. That scam, as well as the Harshad Mehta scam was revealed by Sucheta Dalal.

SonyLiv's 1992 Scam web series is an amazing series, which everyone should watch, as through this you will know a lot about the financial market. All the characters did very well.

Happy Reading !!

 

                   

                       By sachin sharma [ business consultant ]  


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