Case of harshad Mehta Scam

1. PRESENTED BY:
BLUE QCEAN FINANCING
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2. INTRODUCTION
 From Gujrati jain family, childhood was spent in
Mumbai
 First job: Dispatch clerk in the New India Assurance
Company
 During his work , started investing in stock market
with his brother Ashwin Mehta
 Managed to get BSE broker’s card
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3. THE RAG TO RICHES STORY
 Started his career with New
India Assurance co.
 Quit his job in 1981 to become
a sub-broker. Went bankrupt
in 1982 & recovered soon to
become more stronger.
 Went on to become the one
most successful broker –
thereby earning the nick
name of “THE BIG BULL”
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4. Became a Prominent Name
 Started buying shares heavily since early 1990
 The shares which attracted his attention were:
Associated Cement Co. (ACC)
Apollo Tyres
Reliance
Tata Iron and Steel Co. ( TISCO )
BPL
Sterlite
Videocon
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5. ABOUT THE SCAM
 Diversion of funds
 Use of Ready Forward(RF) to maintain SLR(statutory
liquidity ratio) creative Accounting Intra-day Trading
 The Ready Forward is in essence a secured short-term
(typically 15-day) loan from one bank to another.
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6. Growing Stage Of ‘BIG BULL’
 Exploiting the loop hole in the Banking system
 HARSHAD MEHTA’s trademark style:
a) He used to study Fundamentals
b) Buy in big quantity
c) Then make it public
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7. AT MATURITY STAGE
 Here, the Boss of Growmore Research and Asset
management
 He lived almost like celebrity in a 15000 sq. feet house
 Also had a crush for flashy luxurious cars
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8. DECLINING STAGE
 In 1992, first article came out against THE BIG BULL
and the story was about 600+ crores rupees scam from
SBI…..
 He used “Ready Forward deal” for this scam
 As per Indian Law, it was not allowed to give such RF
loan to any individual person by bank
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9. CONTD..
 The bear cartel has exposed the truth behind the
constant rise of this BIG BULL
 Headline of Indian newspaper regarding 4000 crores
rupee scam in Indian Stock Market
 Bear cartel was behind HARSHAD MEHTA now they
filed as many cases as they can against Harshad Mehta
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10. CONSEQUENCES
 BR value became ZERO
 Crash of Financial Institution
 Many suicidal notes were found near dead body of
Indian Stock Traders
 In 4000 crores scam, many Financial firms, many
political parties and many big names were involved,
but surprisingly only one man was trapped
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11. STEPS TAKEN BY SEBI
 SEBI restricted Harshad Mehta from dealing in securities
 Investigation completed in two phases :
 FIRST PHASE: SEBI suspended the 17 brokers and sub-brokers
for 1 to 3 years. They were responsible for
manipulations in the scripts
 SECOND PHASE: The president of BSE told to resign from
his office. And it started hearing in quasi-judicial
manner., after inspecting the documents and hearing of
witnesses
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12. END OF THE BIG BULL
 LATE 2011, place THANA jail, the jail superintended
came to know about end of the BULL era with news of
HARSHAD MEHTA Death
 Reason was HEART ATTACK, but it was shocking to
know that before he died he was proved innocent in all
cases against him
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13. Moral Of The Story……
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