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can raise long term funds. It is a market in which money is lent for periods longer than a year. The capital market includes the stock market and the bond market What is Capital Market scam It is basically fraud done in the Capital market with the investors by manipulating the facts in order to attain enormous profits.?
INTRODUCTION TO THE “BIG BULL OF THE TRADING FLOOR”. : INTRODUCTION TO THE “BIG BULL OF THE TRADING FLOOR”.
PICTURE OF HARSHAD MEHTA OVERVIEW WHO IS THIS MAN? HARSHAD MEHTA- story
Started 1 his career with New India Assurance Co. 2 Quit his job in 1981 to become a sub-broker. 3 Went bankrupt in 1982 & recovered soon to become more stronger. 4 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
1 Diversion of funds 2 Use of Ready Forward (RF) to maintain SLR (Statutory Liquidity Ratio)
the family moved to Raipur . Who knows at that time that it was starting of great Indian scam!! Growth period of Big Bull: EXPLOITING THE LOOPHOLE IN THE BANKING SYSTEM . And after sometimes he has managed to get BSE broker‟s card.3 Creative Accounting 4 Intra-day Trading INTRODUCTION TO BIG BULL’S LIFE Family :gujarati jain family Father : Mr Shantilal Mehta . But his 1st love is always Stock market. Madhya Pradesh. Somehow Harshad Mehta did not find his future in Raipur and could not stay away from Mumbai‟s shiny life style. During his work at new india insurance he has started investing in stock market with his brother Ashwin Mehta. After coming to Mumbai Harshad Mehta joined his 1st job as dispatch clerk in the New India Assurance Company. Harshad Mehta‟s first love was stock exchange. a small businessman Harshad Mehta„s childhood was spent in Mumbai … Later.
rising and rising only. And demand of that stock used to rise like anything after recommendation of this Big Bull !! Market at Harshad Mehta scam . He found that companies are not rising and falling as over their fundamentals. Its “Replacement Price Theory”. He was successful in explaining this theory to Indian public. It was Harshad Mehta‟s trademarked style:1 He used to study fundamentals. But Harshad Mehta It was had reason for all the questions for its rising. 2 he used to buy in big quantity and 3 then he used to make it public. But the fact had another side too. Mr Mehta started buying this ACC at mid 1990 and then he made it public. and he started manipulating HOW IT WAS DONE AND THE ROLE OF THE BROKER He started manipulating one stock named ACC rising .After investing in stock exchange Harshad Mehta found some wrong patterN on trades in stock exchange.
He used to explain people that if . Boss of “Growmore Research and Asset Management “. He was dream seller.. People know this personality as “ The Big Bull” of Indian stock exchange. He was not only Harshad Mehta now. Mr Harshad Mehta is now darling of Indian media. The basic concept behind his view was very optimistic and somehow it was good for Indian money market too. but he was The Harshad Mehta.GRAPH Boom Period of Big Bull’s life: Year 1991. Harshad Mehta thought different then others.
. So it was clear that more than one banks were involved in this scam. Pure manipulation. rupees from SBI. In 1992. Recession Period in Big Bull’s life: His flashy life and charismatic personality was a problem for many Indian and international personalities.beautiful golf patch. The dream of great Indian story was becoming greed generator for Indian public and for Mr Harshad Mehta too. He also had a crush for flashy luxurious cars and no wonder he used to have some of the best car of 1990‟s in his huge parking. 1st article came out against this dream merchant and the story was about 600+ Crores rupees scam !! it was written in article that Harshad Mehta had swiped 600 Crores. But excess of anything is evil. He was using this banks illegally to manipulate the stock exchange mechanism. No one had clue at that time that it was starting of the most dramatic scam of Indian stock exchange. which had a swimming pool . At his peak. the amount is much more than what was said in that news article.000 sq ft house. But fact was unknown till now .fundamental of some company is good it should go up and should always goes up. As per this deal he used to take some short term loan from banks and used this money in stock exchange to rise the price is the security. As per that article Mr Harshad Mehta used “Ready Forward Deal” for this scam. he lived almost like a celebrity in a 15. As per Indian law it was not allowed to give such RF loan to any individual person by bank. With this money mr Harshad Mehta used to make waves in Indian stock exchange.
Everyone knew that Harshad Mehta is getting money from somewhere. some big names like Anand Rathi and Krishnakant Damani were hurt badly it was not a good news for the big bull. Larger than life kind of personality can make the worst enemies for you. And Harshad Mehta used this fact very well for his own personal benefit. And this act was “crime” as per Indian law books. but from where? The bear cartel has exposed the truth behind the constant rise of this big bull.He used the money he borrowed from lending bank on behalf of borrowing bank. When he got some finest luxurious car of the world and he was giving some picture pose of him feeding bears in zoo. Depression of Big Bull’s life: Mr Harshad Mehta had one habit of showing off. public appearance. It was surprising to point out here that even this bear cartel was using same “technique” as Harshad Mehta used. And he invested that money in stock market. But the difference was . in this process the borrowing and lending banks knows only broker and may not know the name of the other party. Whole bear cartel is against Harshad Mehta now. They have used almost all the resources they have. When he came to know this truth it was too late. Bears cartel used the money from overseas banks where as Harshad Mehta used Indian banks for his growth. .
Indian Stock Market crashed like anything. Bear cartel was behind Harshad Mehta now.And on one not so fine day it was headline of Indian news paper regarding 4000 crore rupees scam in Indian stock market. many political parties were involved. But it was shocking to know that before he died. The dream merchant. Many suicidal notes were found near dead bodies of Indian stock traders. he . Indian public faced tough times. And it was enough reason for crash of some financial institutes which would lead Indian financial crises. The jail superintendent came to know about end of the bull era with news of Harshad Mehta‟s death. As the scam was exposed the banks receipts (BR) value became almost zero. The big bull. Now Harshad Mehta was in trouble. place : Thane jail. End of The Big Bull: Late 2001. The Harshad Mehta is now The most hated person!! 4000 crore scam . Reason was heart attack. but surprisingly only one man was trapped.many financial firms were involved. They have used all their sources and made sure that Harshad Mehta would not get any bail. It was one of the worst time Indian market have seen till day. Harshad Mehta. many big names involved in the same case. They filed as many cases as hey can against Harshad Mehta .
and found guilty in only one case. Moral of the Article : Caution: stock market investment is subject to market risk. And one Bull Run came to end. Please read the offer document carefully before investing. The chair person of Growmore Research and Asset Management died.!!! That is how it happened.was proved innocent in all other cases against him.. .