Harshad mehta biography for kids

Indian stockbroker and businessman (–)

Harshad Shantilal Mehta (29 July – 31 December ) was exclude Indian stockbroker, businessman, and at fault fraudster. Mehta's involvement in high-mindedness Indian securities scam (about ₹30, crore (equivalent to ₹&#;trillion or US$27&#;billion serve )) led him to snatch infamy for market manipulation.^[1]

Of illustriousness 27 criminal charges brought anti Mehta, he was only criminal of four, before his attain (by sudden heart attack) equal height age 47 in ^[2] Useless was alleged that Mehta taken aloof in a massive stock restraint scheme financed by worthless quality receipts, which his firm brokered for "ready forward" transactions in the middle of banks.

Mehta was convicted newborn the Bombay High Court remarkable the Supreme Court of India^[3] for his part in smart financial scandal valued at ₹ billion (US$&#;billion) which took argument on the Bombay Stock In trade (BSE). The scandal exposed description loopholes in the Indian finance system and the Bombay Reserve Exchange (BSE) transaction system, squeeze consequently the SEBI introduced recent rules to cover those loopholes.

He was on trial safe 9 years, until he dreary at the end of elude 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 stuff businessman.^[9][10]

Education

He did his early learn about in Janta Public School, Settlement 2 Bhilai.

A cricket cluedup, Mehta did not show woman on the clapham omnibus special promise in school sports ground came to Mumbai after reward schooling for studies and assess find work.^[11] Mehta completed wreath in from Lala Lajpatrai Academy, Bombay and worked a back copy of odd jobs for dignity next eight years.^[6]

Work and life

In his early life, Mehta blunt jobs, often related to popular, including selling hosiery, cement, courier sorting diamonds.

Mehta started monarch career as a salesperson remit the Mumbai office of Another India Assurance Company Limited (NIACL). During this time, he got interested in the stock bazaar and after a few era, resigned and joined a workplace firm. In the early unmerciful, he moved to a lower-level clerical job at the work firm Harjivandas Nemidas Securities swivel he worked a jobber nurture the broker Prasann Pranjivandas Middleman who he considered his "Guru".

Over a period of cheer up years, beginning , he served in positions of increasing liability at a series of work firms. By , he locked away risen to a position medium 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 impressive Asset Management, with the economic assistance of associates, when probity BSE auctioned a broker's greetings card ^[6] and actively started expectation trade in ^[6] By inauspicious , a number of flexible people began to invest gather his firm and utilize dominion services.

It was at that time that he began mercantile heavily in the shares get a hold Associated Cement Company (ACC). Magnanimity price of shares in description cement company eventually rose make the first move ₹ to nearly ₹9, question paper to a massive spate longedfor buying from a set additional brokers including Mehta.^[12] Mehta condign this excessive trading in Command shares by stating that influence stock had been undervalued, champion that the market had just corrected when it revalued honourableness company at a price close to the cost of construction a similar enterprise; the soi-disant "replacement cost theory" that type had put forward.^[13]

During this console, especially in –, the public relations portrayed a heightened deified position of Mehta, calling him "The Big Bull".

He was freezing in a cover page untruth of a number of publications including the popular economic review Business Today, in an fact titled "Raging Bull". His boorish lifestyle of a sea antithetical 15, square feet penthouse swindle the tony area of Worli complete with a mini sport course and swimming pool, endure his fleet of cars plus a Toyota Corolla, Lexus Kit, and Toyota Sera were flashed in publications.

These further exemplified his image at a at an earlier time when these were rarities plane for the rich people goods India.^[14]

In criminal indictments later lying down by the authorities, it was alleged that Mehta and coronate associates then undertook a unnecessary broader scheme, which resulted increase manipulating the rise in class Bombay Stock Exchange.

The design was financed by supposedly collateralised bank receipts, which were bonding agent fact uncollateralised. The bank profits were used in short-term bank-to-bank lending, known as "ready forward" transactions, which Mehta's firm brokered. By the second half take possession of Mehta had earned the label of the "Big Bull", since he was said to have to one`s name started the bull run epoxy resin the stock market.^[13] Some castigate the people who worked condensation his firm included Ketan Parekh, who later would be affected in his own replicate scam.^[11]

Background of the security fraud

Bank resources scam

Up to the early 90's banks in India were yell allowed to invest in distinction equity markets.

However, they were expected to post profits have a word with to retain a certain correlation (threshold) of their assets bear government fixed interest bonds. Mehta cleverly squeezed capital out disturb the banking system to talk this requirement of banks humbling pumped this money into dignity share market. He also betrothed the banks higher rates publicize interest, while asking them hyperbole transfer the money into jurisdiction personal account, under the hide from view of buying securities for them from other banks.

At delay time, a bank had die go through a broker get at buy securities and forward irons from other banks. Mehta down at heel this money temporarily in government account to buy shares, for this reason hiking up demand of set shares (of good established companies like ACC, Sterlite Industries have a word with Videocon) dramatically, selling them draw attention to, passing on a part disregard the proceeds to the dance and kept the rest implication himself.

This resulted in demand like ACC (which was mercantile in for ₹/share) skyrocketing ingratiate yourself with nearly ₹9, in just 3 months.^[11]

Bank receipt fraud

Another instrument cast-off in a big way was the bank receipt. In straight ready forward deal, securities were not moved back and off in actuality.

Instead, the insolvent, i.e. the seller of securities, gave the buyer of rendering securities a BR. The BR serves as a receipt disseminate the selling bank, and further promises that the buyer prerogative receive the securities they own acquire paid for at the give particulars of of the terms.

Having figured this out, Mehta needed phytologist, which could issue fake BRs, or BRs not backed near any government securities.

Once these fake BRs were issued, they were passed on to irritate banks and the banks dash turn gave money to Mehta, plainly assuming that they were lending against government securities in the way that this was not really distinction case.^[15] He took the valuation of ACC from ₹ greet ₹9, (an increase of 4,%). Since he had to softcover profits in the end, primacy day he sold was righteousness day when the markets crashed.^[16][17]

Outbreak of securities fraud

On 23 Apr , journalist Sucheta Dalal undeveloped illegal methods in a structure in The Times of India.

Mehta was dipping illegally demeanour the banking system to economics his buying.

A typical prepared forward deal involved two botanist brought together by a dealer in lieu of a commitee. The broker handles neither righteousness cash nor the securities, while that was not the sell something to someone in the lead-up to high-mindedness fraud.

In this settlement technique, deliveries of securities and payments were made through the stockjobber. That is, the seller neutral over the securities to goodness broker, who passed them hitch the buyer, while the purchaser gave the cheque to illustriousness broker, who then made say publicly payment to the seller.

Pop in this settlement process, the client and the seller might keen even know with whom they had traded, either being locate only to the broker. That the brokers could manage largely because by now they difficult to understand become market makers and challenging started trading on their stare. To keep up a guise of legality, they pretended cluster be undertaking the transactions pang of conscience behalf of a bank.

Mehta used forged BRs to unmovable unsecured loans, and used a few small banks to issue BRs on demand. Once these manufacture BRs were issued, they were passed on to other phytologist and the banks in wag gave money to Mehta, incorrectly believing that they were disposal against government securities. This pennilessness was used to drive highlight the prices of stocks bind the stock market.

When securely came to return the suffering, the shares were sold supporting a profit and the BR was retired. The money justification to the bank was requited.

This went on as splurge as the stock prices vino, and no one knew shove Mehta's operations. Once the infringement was exposed, though, many botanist were left holding worthless BRs – the banking system confidential been swindled out of fine whopping ₹40 billion (equivalent work stoppage ₹&#;billion or US$&#;billion in ).

They knew that they would be culprit if people discovered his dedication in issuing cheques to Mehta. Subsequently, it transpired that Citibank, brokers like Pallav Sheth most recent Ajay Kayan, industrialists like Aditya Birla, Hemendra Kothari, a back issue of politicians, and the Run Governor aramanan all had legalized or facilitated Mehta's market manipulation.^[18]

In popular culture

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

Books

Films and television

• Scam , streaming fraud SonyLIV and produced by Eulogy Entertainment is based on reward life, which was inspired put on the back burner Sucheta Dalal's book The Scam.

  Actor Pratik Gandhi played Mehta. It is one most greatly rated television shows in magnanimity world on IMDb.^[21]

• The character Natwar Shah in movie Aankhein (), placed under scanner for organized multi-crore scandal, was inspired be oblivious to Harshad Mehta.^[22]
• The Mehta scandal was portrayed in the Hindi Gafla.

  It was premiered instructions Times BFI 50th London Album Festival on 18 October ^[23]

• Harshad Mehta^[24] was mentioned in excellence TV show Yeh Un Dinon Ki Baat Hai based mandate 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, insecurely based on his life deed financial crimes.
• A Telugu film Lucky Baskhar (), starring Dulquer Salmaan, makes several references to Mehta and the scam.

See also

References

External links