Earlier this month, Jyoti—wife of erstwhile stock market ‘Big Bull’ Harshad Shantilal Mehta—and her family launched a website in his name. The purpose was to publicly share the alleged harassment that she and her family have been facing from the Income Tax Department, even after her husband’s death, for nearly three decades, despite winning more than 1,200 cases filed against them in various judicial forums.
Most of these cases are a result of the famous—almost immortalised—scam of 1992, for
which Harshad Mehta is accused. What he pulled off in 1992 was nearly inconceivable.
Without possessing the money to buy stocks in the market, he made millions, and in the
process jacked up stock prices of some of the most prominent listed companies. He found loopholes in the system to pull off the scam.
To put it simply, a trader on the Bombay Stock Exchange (BSE) could place an order to buy stocks on a Monday and square off positions between Tuesday and Thursday. Friday would usually be the settlement day, when the order would be complete. Mehta, in connivance with some banks, manipulated the securities market, and colluded with some to get fake bank receipts (BRs) issued. He used them to raise money from other banks to invest in the stock market. Banks would lend him money as they thought the receipts were backed by underlying government securities. In this way, he manipulated the stock market, driving it up by as much as four times in a short span. A committee under…
