Business ethics case study

Class – T.Y.BBA .

Ayush agrawal (09)

Chirag randhir (23)
Rupam khune (60)
Swaraj malusare (70)
Vaishnav magar(75)
Harshad Mehta Scam
The Man who shook the Nation !
The Instruments were used in Scam

• Mehta had used 2 instruments in this scam

1)Ready Forward Deal

2)Bank Receipts
 Ready Forward Deal

A secured short-term (typically 15-day) loan from one bank

to another

Bank lends against government securities

A broker usually brings together two banks for which he is
paid a commission

The securities and payments were delivered through the

broker in the settlement process

In such settlement the banks may not know with whom they
are dealing
 What Roles did the Brokers Play
Here?

Brokers in the markets played the role of intermediaries

between two banks in the RFD system. They were supposed
to act as middlemen helping borrowing banks meet lending
banks. A brokers’ role should have ended here where it is done
in exchange for a commission.
Where the actual exchange of securities and payments should
have taken place only between the bank’s brokers soon found
a way to play a larger role. Eventually, all transfers of
securities and payments were made to the broker
Thank You…!!!