Harshad Shantilal Mehta, often dubbed the “Big Bull” of the Indian stock market, remains an enigmatic figure whose life oscillated between unparalleled success and dramatic downfall. Born in 1954 in Rajkot, Gujarat, Mehta’s journey from modest beginnings to commanding the financial corridors of Mumbai is a testament to his audacious ambition and intricate understanding of the stock market.
Harshad Mehta: Key factsFull name: Harshad Shantilal Mehta Harshad Mehta birth: 1954 Harshad Mehta death: 2001 (at the age of 47) Harshad Mehta Place of death: Thane Civil Hospital Harshad Mehta cause of death: Heart attack Harshad Mehta education: B Com from Mumbai’s Lala Lajpat Rai College Harshad Mehta wife: Jyoti Mehta Harshad Mehta son: Aatur Mehta Harshad Mehta father: Shantilal Mehta Harshad Mehta mother: Rasilaben Mehta Harshad Mehta brother: Ashwin Mehta Harshad Mehta cars: Lexus Starlet, Toyota Corolla, Toyota Sera Harshad Mehta property: Madhuli Cooperative Housing Society at Worli |
The early life of Harshad Mehta and ascent in the stock market
Source: Sanjay Malik
Harshad Shantilal Mehta’s journey from modest beginnings to becoming prominent in India’s stock market is a tale of ambition, innovation, and controversy. Born on July 29, 1954, in Mumbai, Mehta’s early life was marked by financial hardships, especially after his family relocated to Raipur due to his father’s health issues and subsequent business setbacks. Despite these challenges, Mehta’s parents prioritised education, ensuring their children received quality schooling.
In 1973, Mehta returned to Mumbai, enrolling at Lala Lajpatrai College of Commerce. He undertook various jobs to support himself, including supplying cement and polishing diamonds. His foray into the financial sector began in 1976 when he joined New India Assurance in their head office at Fort Mumbai. During this tenure, Mehta became interested in the stock market, frequently visiting the Bombay Stock Exchange (BSE) during lunch breaks. His determination led him to secure a broker’s badge and block, marking his official entry into stock trading.
By 1978, Mehta had resigned from his insurance job to focus entirely on the stock market. He specialised in market making, providing liquidity by offering two-way quotes and ensuring positions were squared off by day’s end. His adeptness in this role earned him significant success and laid the foundation for his future ventures.
The early 1980s were a period of both triumphs and trials for Mehta. In 1982, a sudden market downturn resulted in substantial losses, temporarily suspending his trading privileges. Demonstrating resilience, Mehta honoured all his commitments, even liquidating personal assets to settle dues. This phase reinforced his reputation for integrity and determination.
In 1984, Mehta’s career took a significant turn when he joined a prominent stockbroking firm. By 1986, leveraging financial support from associates, he established his firm, GrowMore Research and Asset Management. This venture allowed him to trade on a larger scale, attracting a clientele that included notable individuals and institutions. Mehta’s strategic insights and aggressive trading strategies soon earned him the moniker “The Big Bull,” as he was perceived to have initiated a bullish trend in the stock market.
The lavish lifestyle: Harshad Mehta’s properties and assets
Mehta’s financial triumphs were mirrored in his opulent lifestyle, epitomised by his extravagant real estate investments and a fleet of luxury vehicles.
Harshad Mehta’s Madhuli Penthouse: A symbol of grandeur
Source: Mominix
At the zenith of his career, Mehta resided in a sprawling penthouse within the Madhuli Cooperative Housing Society in Mumbai’s upscale Worli Sea Face area. This residence was not merely a home but a manifestation of luxury and sophistication.
Architecture and design: The penthouse was an amalgamation of eight interconnected apartments spread across two floors, collectively covering approximately 15,000 square feet. This expansive space was meticulously designed to offer panoramic views of the Arabian Sea, with large glass windows that flooded the interiors with natural light. The design seamlessly blended comfort with grandeur, featuring high ceilings, marble flooring, and state-of-the-art fixtures.
Amenities: Mehta’s residence boasted a plethora of high-end amenities, including:
- Private swimming pool: A temperature-controlled pool offering serene sea views.
- Mini-theatre: Equipped with the latest audiovisual technology for private screenings.
- Billiards room: A dedicated space for leisure and entertainment.
- Nine-hole putting green: A personalised golf course catering to his sports passion.
Family residence: The penthouse served as a familial hub, accommodating Mehta’s extended family, including his mother, wife Jyoti, son Aatur, and his brothers with their families. This joint family setup underscored Mehta’s importance on familial bonds and collective living.
A lavish penthouse unlike any other
This penthouse was created by interconnecting nine flats on the third and fourth floors of the 14-storeyed Madhuli Cooperative Housing Society at Worli. These amenities in his penthouse were utterly unheard of in India in the 1990s when the economy started opening up.
To those familiar with Mumbai’s space crunch and its impact on the city’s housing prices, Harshad Mehta’s home, which housed his extended family, was awe-inspiring.
A display of wealth and power
His property possession was a big deal, and Harshad Mehta, whose chutzpah and tenacity impressed and offended in equal measure those who knew him, flaunted it. Along with his fancy fleet of around 29 imported luxury cars (some worth as much as Rs 40 lakhs), he even lent his swanky property for photography to the media.
This is the house from where the Central Bureau of Investigation (CBI) detectives took him away on November 9, 1991, after the scam was unearthed.
Financial troubles and the attempt to sell
Harshad Mehta came close to selling his family’s property to repay his broker because of his severe losses in the stock market at one point.
Additional real estate holdings of Harshad Mehta
Beyond the Madhuli penthouse, Mehta’s real estate portfolio extended to other prime locations:
- Vandana cooperative housing society, Juhu: Mehta owned two sea-facing apartments (Nos. 202 and 301) spanning 1,150 square feet. These properties, located in the serene Janki Kutir area, were valued between ₹7 to ₹8 crores, reflecting their premium status.
- Harshad Mehta’s Growmore research and asset management office: Situated in the prestigious Maker Chambers V at Nariman Point, Mumbai, this office occupied an entire floor. Nariman Point, one of the world’s most expensive commercial hubs, signified Mehta’s influential presence in the financial sector.
Harshad Mehta net worth
A self-made millionaire, Harshad Mehta net worth stood at Rs 3,542 crores when he was at the peak of his stock-broking game. In dollar terms, Harshad Mehta net worth could be converted to over USD 480 million.
What happened to Harshad Mehta’s properties and assets?
With Mehta’s downfall, his once-magnificent empire crumbled. His assets were confiscated, auctioned, or remained entangled in legal disputes.
Auctioning of the flats after the scam
In 2009, the custodian appointed by the Supreme Court to manage Harshad Mehta’s assets started the process of auctioning eight out of the nine flats to pay off his debt to banks and the Income Tax (IT) department. The IT department had a claim of Rs 20,000 crore on Harshad Mehta and associates, including compounded interest.
Despite paying a price much lower than the predicted market rate, Mumbai-based stockbroker Ashok Samani tried to buy the eight flats for Rs 32.6 crores.
Legal battle over ownership
However, the Mehta family challenged the custodian’s move to auction the family-owned properties, arguing that Harshad Mehta was not the property owner.
The court later rejected the Mehta family’s plea, stating:
“What is pertinent is that the principal business of the family was dealing in shares and securities. The liabilities arise from the transactions in securities and shares. The properties have also been purchased using the same business’s funds. Therefore, to clear the liabilities (of Mehta) that have arisen because of the transactions undertaken, the properties of all the members of the family who are notified will also have to be disposed of.”
Auction cancelled, litigation ensued
Following this ruling, Ashok Samani’s bid was cancelled, and the matter remained tied up in litigation, leaving the fate of the luxurious Madhuli penthouse uncertain.
The Madhuli penthouse
Authorities seized the iconic Madhuli penthouse. Over the years, it was auctioned multiple times, yet legal complications prolonged the process. Despite its prime location in Worli, Mumbai, the property struggled to find buyers due to its controversial history.
Vandana cooperative housing society flats
Harshad Mehta owned two sea-facing apartments (Nos. 202 and 301) in the Vandana Cooperative Housing Society on Janki Kutir Road, Juhu, each measuring 1,150 square feet. These properties were seized and slated for auction by authorities aiming to recover dues. In 2018, market speculations suggested that each flat could fetch approximately ₹6 crore. However, specific details regarding the auction outcomes are not readily available, leaving the current status of these apartments ambiguous.
Juhu Apartments
Mehta’s Juhu properties, part of the Vandana Cooperative Housing Society, were also seized. These apartments were later sold through auctions to recover debts owed to banks.
Nariman Point Office
The Maker Chambers V office in Nariman Point, once a bustling hub for Growmore Research and Asset Management, was among the first properties seized by authorities. Given its prime commercial location, it attracted corporate interest during subsequent auctions.
Auction of Harshad Mehta’s assets
To recover dues, several auctions were conducted by authorities over the years. High-value real estate and stock market holdings were sold, though legal hurdles delayed full liquidation. Some properties remained unsold due to their association with the scam.
The exquisite car collection of Harshad Mehta
Mehta’s penchant for luxury extended to his collection of high-end automobiles, which was both diverse and avant-garde:
- Harshad Mehta’s Lexus LS400: Mehta was the first individual in India to own this imported luxury sedan, a testament to his desire for exclusivity. The Lexus LS400, renowned for its advanced engineering and plush interiors, was a rarity on Indian roads during the early 1990s.
- Hindustan Motors Contessa: Often dubbed the ‘Indian muscle car,’ the Contessa was celebrated for its robust performance and spacious interiors. Mehta’s acquisition of this vehicle underscored his appreciation for style and substance.
Source: Vivek
- Fiat Padmini: A symbol of elegance in its era, the Fiat Padmini was a popular choice among Mumbai’s elite. Mehta’s ownership of this car reflected his connection to classic automotive design.
Source: Medusa in
- Toyota Corolla and Toyota Sera: These models highlighted Mehta’s inclination towards innovative automotive technology and design, with the Sera being particularly noted for its distinctive gull-wing doors.
Source: Mominix
Source: Mominix
His collection, comprising approximately 15 to 20 cars, was not merely about possession but a reflection of his status and refined taste.
See also: All about Amitabh Bachchan house and his real estate investments
The 1992 Harshad Mehta’s scam: Rise and fall
Mehta’s financial empire, however, was built on precarious foundations. In 1992, investigations unveiled a massive securities scam orchestrated by Mehta, involving the manipulation of stock prices and misappropriation of funds from several banks. This revelation led to a seismic crash in the stock market, eroding investor confidence and destabilising the financial ecosystem.
Modus operandi
Mehta exploited systemic loopholes in the banking sector, particularly through the misuse of Bank Receipts (BRs) in Ready Forward (RF) deals. By forging BRs, he secured unsecured loans, channeling these funds into the stock market to artificially inflate share prices. This manipulation created an illusion of a bullish market, attracting unsuspecting investors and further driving up stock values.
Legal repercussions and asset seizure
The exposure of the scam precipitated swift legal action against Mehta. The Central Bureau of Investigation (CBI) and the Reserve Bank of India (RBI) initiated investigations, leading to multiple charges under the Indian Penal Code (IPC) and the Securities and Exchange Board of India (SEBI) regulations. The fallout was immense:
- Arrest and legal battles: Harshad Mehta was arrested in 1992 and faced nearly 72 criminal charges and 600 civil suits. His assets, including bank accounts, properties, and investments, were frozen or seized.
- Conviction and sentencing: In 1999, Mehta was convicted in one of the many cases and sentenced to five years in prison. Legal battles continued, with his family fighting several cases even after his death.
Harshad Mehta’s death in police custody
On December 31, 2001, Mehta died at 47 in Thane Central Jail due to a heart ailment. His health had deteriorated, and he reportedly received inadequate medical attention. His death ended one of India’s most controversial financial sagas, but the legal battles persisted.
Where is Harshad Mehta’s family now?
Even after his death, Mehta’s family continued to face legal troubles and financial challenges. His wife, Jyoti Mehta and son Aatur Mehta fought numerous cases to reclaim assets and settle pending lawsuits.
Legal battles and financial struggles
- Jyoti Mehta’s fight for justice: In 2019, Jyoti won a case against Federal Bank and Stock Holding Corporation of India (SHCIL), reclaiming ₹6 crores, which had accumulated interest over the years. This was one of the few financial wins for the family.
- Aatur Mehta’s low-key life: Unlike his father, Aatur has maintained a low profile. Reports suggest he is involved in business and finance, though he has avoided stock market controversies.
- Property disputes: The Mehta family engaged in legal battles to reclaim specific properties, but many were sold by authorities to settle dues.
Where does Harshad Mehta’s family live now?
Following Harshad Mehta’s death in 2001, his family faced numerous legal and financial challenges. His wife, Jyoti Mehta, and son, Aatur Mehta, have maintained a low profile, and specific details about their current residence are not publicly disclosed.
However, it is known that they continue to reside in Mumbai. Jyoti Mehta has been actively involved in legal battles to clear her husband’s name and recover assets. In 2019, she won a case against the Stock Holding Corporation of India Limited (SHCIL), reclaiming a significant sum. Aatur Mehta, on the other hand, has pursued a career in business and finance, steering clear of public attention.
What does Harshad Mehta’s son Atur Mehta do now?
Atur Mehta, the son of the late Harshad Mehta, has established himself as an entrepreneur and innovator in the technology sector. He is the Co-Founder and Chief Technology Officer (CTO) of Square Off, a company renowned for developing automated chess boards that enable users to play against opponents worldwide or challenge artificial intelligence. These chess boards are equipped with computerised movements, providing players a seamless and interactive experience.
Before co-founding Square Off in 2015, Atur was the Chief Project Innovator at riidl (Research Innovation Incubation Design Laboratory), which started in 2012. His academic background includes a Bachelor of Engineering in Electrical and Electronics Engineering from the University of Mumbai, which he earned between 2011 and 2015.
Beyond his professional endeavours, Atur is known for his passion for adventure travel and often shares his experiences on social media platforms. His journey from being associated with a high-profile financial scandal to carving out a niche in the tech industry exemplifies resilience and a commitment to innovation.
Harshad Mehta’s brother, Ashwin Mehta, has also played a crucial role in addressing the family’s legal issues. After obtaining a law degree, he represented the family in court proceedings. As of recent reports, Ashwin Mehta continues to practice law in Mumbai, focusing on matters related to the family’s legal affairs.
While the exact details of the Mehta family’s current living arrangements remain private, it is evident that they have worked diligently to navigate the complexities arising from Harshad Mehta’s financial dealings and subsequent legal entanglements.
Family’s net worth in 2025
It is difficult to pinpoint the exact net worth of the Mehta family in 2025. With most of Harshad Mehta’s wealth confiscated or lost in legal disputes, the family’s financial status remains modest compared to their past. However, they have managed to sustain themselves with business ventures and legal wins.
The legacy of Harshad Mehta
Despite the scam, Harshad Mehta’s influence on India’s financial markets is undeniable. His tactics exposed loopholes in the banking system, leading to major reforms. His story continues to be a subject of books, documentaries, and even Bollywood adaptations like Scam 1992: The Harshad Mehta Story.
Key takeaways from his life
- Stock market genius, But at a Cost: Mehta’s deep understanding of the market allowed him to rise quickly, but his manipulation ultimately led to his downfall.
- Reforms and regulations: The 1992 scam led to stricter financial regulations, with SEBI implementing stronger checks to prevent similar frauds.
- Cautionary tale: His rise and fall serve as a lesson on the consequences of greed and unchecked ambition.
See also: All about the SARFAESI Act
Status and legal battles surrounding harshad mehta’s properties
Auction outcomes and legal challenges
- 2009 auction attempt: In 2009, the custodian appointed by the Supreme Court initiated the auction of eight out of nine flats in the Madhuli Cooperative Housing Society at Worli, Mumbai, to repay debts owed to banks and the Income Tax Department. Mumbai-based stockbroker Ashok Samani won the bid for these flats at Rs 32.6 crore. However, the Mehta family contested the auction, claiming that Harshad Mehta was not the owner of the properties. The legal dispute led to the cancellation of Samani’s bid, and the matter became entangled in litigation.
- Supreme court’s stance: In 2008, the Supreme Court refused to stay the auction of properties worth over Rs 100 crore belonging to Harshad Mehta in Mumbai. The court allowed the auction to proceed but stipulated that the occupants, including Mehta’s family members, should not be dispossessed until the disposal of the appeal.
Current status of properties
- Madhuli cooperative housing society flats: The legal challenges have prolonged the resolution of ownership and sale of these properties. As of the latest available information, the status of these flats remains uncertain due to ongoing litigation.
- Vandana cooperative housing society flats: Harshad Mehta owned two apartments (Nos. 202 and 301) in Vandana CHS on Janki Kutir Road, Juhu, each measuring 1,150 square feet with sea views. These properties were also seized and put up for auction by the authorities to recover dues. In 2018, it was speculated that each flat could fetch around Rs 6 crore, but specific details about the auction outcomes are not readily available.
Legal battles
The Mehta family has been actively involved in legal proceedings to reclaim or retain their properties. They have challenged the auctions and the claims that Harshad Mehta was the owner, leading to prolonged litigation. The complexities of these legal battles have resulted in delays in the final disposition of the properties.
Eventual owners
Due to the ongoing legal disputes and challenges to the auctions, the eventual ownership of many of Harshad Mehta’s properties remains unresolved. The combination of legal hurdles and claims from various parties has complicated the process of transferring ownership.
Harshad Mehta scam: What did Harshad Mehta do?
At the time when Harshad Mehta perpetrated arguably the biggest securities fraud in India, the settlement cycle, the time within which brokers had to pay full money and take delivery of stocks or deliver stocks if sold, was 14 days. (The settlement cycle is now two days.) Also, a customer did not need to maintain a minimum balance to buy stocks and a broker did not need a Demat account to sell stock. All these loopholes in the system acted as an enabler for Harshad Mehta.
Harshad Mehta manipulated stocks by illegally procuring funds from several high-profile banks, including State Bank of India, UCO Bank and National Housing Bank, using fake bank receipts. Since banking norms at that time did not allow stock brokers to borrow funds from banks for trading purposes, Harshad Mehta found a way to work around this system. He got in touch with several banks, bought and sold government securities using a timeframe, during which he used the funds thus collected to buy shares of companies, fuelling prices. It is believed that even if one of his associates simply asked for the share price of a company stock, it was enough to shoot up the share price. Remarkably impressed with the success of his scheme, Harshad Mehta scaled up his fraud by asking banks to help him print fake bank receipts.
Manipulation of associated cement company (ACC) shares
One of Harshad Mehta’s most well-known market moves was his manipulation of Associated Cement Company (ACC) shares, a defining example of his ability to create stock market frenzies. While his actions in this case were not illegal, they played a crucial role in the overall stock market distortion that eventually led to his downfall.
How did he do it?
Mehta identified that ACC’s stock was significantly undervalued. At the time, its share price hovered around ₹200 per share, which he believed did not reflect the company’s true worth. He applied what he called the “replacement cost theory,” arguing that the valuation of a company should be based on the cost of building a similar enterprise from scratch rather than just its current book value.
Using large-scale buying, Mehta aggressively purchased vast ACC shares, creating an artificial demand. The market followed suit, and the stock’s price soared from ₹200 to nearly ₹9,000 quickly. This astronomical rise was not entirely market-driven—Mehta’s aggressive buying strategy carefully orchestrated it.
Was it a fraud?
Mehta’s move with ACC shares was not fraudulent in itself. Buying large quantities of stock and influencing its price through demand is not illegal—investors and hedge funds often engage in similar bulk purchases. His replacement cost theory, while debatable, was also a fundamental financial concept.
However, the problem lay in how he financed these trades. The money used to buy ACC shares was not his own—it was illegally obtained from banks.
- Misuse of bank receipts (BRs): Mehta exploited banking loopholes to secure unsecured loans, manipulating the system to access funds meant for interbank transactions.
- Ready-forward (RF) scam: He diverted money from short-term bank lending deals, which were supposed to be used for government securities, and instead pumped it into the stock market.
- Artificial market inflation: He artificially drove prices up by injecting enormous sums into specific stocks like ACC, luring retail investors into the trap.
The big picture
While driving up a stock’s price through large-scale buying was not illegal, the illicit financial engineering that funded these trades turned it into a massive financial scandal. His manipulation of ACC and other stocks resulted from more profound banking fraud, leading to one of India’s most prominent financial scandals.
Operational structure of growmore research and asset management
While specific internal details of Growmore’s operational structure remain limited, insights can be drawn from its business activities and the broader context of Mehta’s financial empire:
Leadership and management: Harshad Mehta, as the founder and chief strategist, was the driving force behind the company’s vision and operations. He was supported by his brothers, notably Ashwin and Sudhir Mehta, who held significant roles within the organisation.
Core activities:
- Securities trading: Growmore was heavily involved in trading a diverse portfolio of securities, including equities and government bonds. The company leveraged market opportunities to maximise returns, often engaging in substantial transactions that influenced market dynamics.
- Brokerage services: As an intermediary, Growmore facilitated transactions between various financial entities, earning commissions and fees. This role positioned the company at the nexus of significant financial flows.
Banking relationships: A pivotal aspect of Growmore’s operations was its intricate relationships with numerous banks. These connections were instrumental in accessing capital and executing large-scale transactions, which, as investigations later revealed, included exploiting systemic loopholes for financial gain.
- Employee structure: While exact numbers are not publicly documented, it’s evident that Growmore employed a team of traders, analysts, and administrative staff. This workforce was essential in executing the company’s high-volume trading activities and maintaining its expansive financial operations.
What is a bank receipt (BR)?
While selling securities, banks have to provide bank receipts to those buying these securities. These bank receipts act as a proof that the transaction has taken place. Since Harshad Mehta colluded with banks and was able to print fake bank receipts, anytime a bank wanted to have some securities, he provided fake bank receipts. In exchange, the bank would give money to Harshad Mehta. Using that money, Harshad Mehta invested in the stock market, dramatically shooting up the share price of some companies. When the stock price was at its peak, Harshad Mehta would sell the stock, making huge gains. Once this cycle was over, Harshad Mehta would return the bank’s money and take back his fake bank receipts.
Harshad Mehta had to face over 600 civil action suits and 70 criminal cases for the fraud he committed.
Recovery from asset seizures
Following Harshad Mehta’s involvement in the 1992 securities scam, the Indian judiciary and regulatory bodies initiated extensive efforts to recover the defrauded money through asset seizures and auctions. The Supreme Court-appointed custodian managed and liquidated Mehta’s assets to repay the outstanding dues to banks, financial institutions, and the Income Tax Department.
- Seized assets: The authorities seized multiple properties, including Mehta’s luxurious penthouse at Madhuli Cooperative Housing Society, office spaces in Maker Chambers V at Nariman Point, and two apartments in Vandana Cooperative Housing Society, Juhu. Additionally, luxury cars, jewellery, and bank accounts linked to Mehta were frozen.
- Auction proceeds: In 2009, an attempt to auction eight out of nine flats in the Madhuli Cooperative Housing Society fetched bids worth Rs 32.6 crore. However, legal disputes with Mehta’s family delayed the auction process, and subsequent attempts faced similar hurdles. As of the latest available information, the cumulative recovery from asset auctions remains limited, with estimated proceeds amounting to approximately Rs 70-80 crore, a fraction of the total liabilities.
- Unrealized recoveries: Despite multiple auctions, a significant portion of Mehta’s assets remains entangled in legal battles, limiting the total recovery. The Income Tax Department alone had claims exceeding Rs 20,000 crore, including compounded interest, most of which remains unrecovered.
What happened to Harshad Mehta’s shares, investments, and movable assets?
Beyond real estate and luxury vehicles, Harshad Mehta’s wealth included significant holdings in shares, fixed deposits, and possibly movable assets like gold and jewelry. Following the exposure of the 1992 securities scam, these asset classes were also subject to seizure and scrutiny.
Stock holdings and demat accounts
Mehta held substantial equity in several blue-chip companies, acquired through both legal and fraudulent means. His stock holdings were frozen by regulatory bodies post-1992 and later liquidated in phases by the custodian appointed under the Special Courts Act, 1992. Several stocks were offloaded to recover dues, but the exact monetary value recovered through these equity sales remains undisclosed in public records.
Fixed deposits and bank balances
Investigations by the Income Tax Department and CBI led to the freezing of numerous bank accounts linked to Mehta and his family. Fixed deposits held in both personal and firm accounts were liquidated under court orders, and proceeds were added to the recovery pool.
Jewelry and other movable assets
Authorities also seized high-value jewelry and personal items from Mehta’s residence, including items collected during the raids. However, due to lack of full inventory disclosures, the actual valuation and contribution of these items toward liability settlement remain unclear.
Offshore assets and international traceability
Despite the scale of Mehta’s fraud, there is no publicly available evidence of the Indian authorities tracing offshore accounts or foreign property linked to him. Given the era and the regulatory limitations of the 1990s, it is possible that any such holdings, if they existed, escaped detection or were never declared.
Impact on banks and investors
The scam had a profound and far-reaching impact on India’s financial ecosystem, with institutional and retail investors suffering substantial losses.
- Losses to banks: Major public sector banks like the State Bank of India (SBI), UCO Bank, and the National Housing Bank (NHB) faced significant financial setbacks. SBI reported a direct loss of around Rs 600 crore, while NHB faced losses exceeding Rs 1,000 crore due to their exposure to fraudulent transactions facilitated through fake bank receipts.
- Investor fallout: The scam led to a stock market crash, wiping out billions of rupees in investor wealth. The BSE Sensex, which had surged to 4,500 points due to Mehta’s manipulations, plummeted sharply after the scam was exposed, eroding the savings of countless retail investors.
Regulatory reforms: The financial debacle prompted sweeping reforms in India’s banking and stock market regulations. Establishing the Securities and Exchange Board of India (SEBI) as the primary market regulator with enhanced powers helped restore investor confidence and tighten control over market practices.
Legal proceedings and judicial response to the Harshad Mehta scam
The 1992 securities scam orchestrated by Harshad Mehta led to extensive legal proceedings that profoundly impacted India’s financial regulatory framework. Mehta, a stockbroker, exploited systemic banking loopholes to manipulate stock prices, resulting in charges including 72 criminal offenses and over 600 civil suits.
In response, the Indian government established the Special Court under the Special Courts Act, 1992, to expedite the adjudication of such financial frauds.
This court was pivotal in prosecuting Mehta and his associates, ensuring a focused approach to complex financial crimes.
The Central Bureau of Investigation (CBI) arrested Mehta in November 1992, leading to a series of trials. In September 1999, the Bombay High Court convicted him, sentencing him to five years of rigorous imprisonment and imposing a fine. This conviction was upheld by the Supreme Court of India in January 2003, reinforcing the judiciary’s stance against financial malpractices.
Source: https://in.pinterest.com/pin/1037939045370751849
These legal proceedings underscored the judiciary’s commitment to addressing financial fraud and prompted significant reforms in India’s financial regulatory system, enhancing transparency and accountability in the securities market.
FAQs
When did Harshad Mehta die?
Harshad Mehta died in 2001.
What cars did Harshad Mehta own?
Among the many cars Harshad Mehta owned included the Lexus Starlet, Toyota Corolla and Toyota Sera.
Where did Harshad Mehta work as a jobber?
Placed at a lower level clerical job at the brokerage firm Harjivandas Nemidas Securities, Harshad Mehta worked as a jobber for the broker Prasann Pranjivandas Broker.
Who revealed the Harshad Mehta scam?
Journalist Sucheta Dalal, working for The Times of India at that time, revealed the Harshad Mehta scam.
Who is Aatur Harshad Mehta?
Aatur Harshad Mehta is the only child of late Harshad Mehta. An investor and entrepreneur like his father Harshad Mehta, Aatur Harshad Mehta likes to keep a low profile, living his life away from media attention. Aatur Harshad Mehta was, however, in the news in 2018 when he bought a significant stake in Fair Deal Filaments, a BSE-listed textile company. The company agreed to sell 1.4 million shares to Aatur Harshad Mehta and Sanalkumar Kizhepata Menon through an open market transaction. Aatur Harshad Mehta was 22 at the time of his father's demise.
(Header image courtesy Soujanya Raj, Wikimedia Commons)