Now since Harshad Mehta was dealing with many banks at the same time he could then keep some capital with him at all times. For eg. He takes money from A on Monday,and tells B that he’ll pay on Tuesday, then he takes money from C on Tuesday and tells D that he’ll pay on Wednesday and the money he gets from C is paid to B and as a result he has some working capital with him at all times if this goes on with other banks throughout the week. The banks at that time were not allowed to invest in the equity markets. Harshad Mehta had very cleverly squeezed some capital out of the banking system. This capital he invested in the stock market and managed to stoke a massive boom.
Read Indian Stock Market Articles
He took the price of ACC from 200 to 9000.Thats an increase of 4400%!!!The market went up like crazy and the bulls were on a mad run. Since he had to book profits in the end, the day he sold was the day when the market crashed. The same day Vijaya Bank chairman committed suicide by jumping from the top of the banks’ office. The chairman knew that when it would become public that he had written cheques in the name of Mehta, he would be dead meat. One rather unknown fact about this scam is that there was a very important player in this scam who managed to keep a very low profile. That man was Nimesh Shah. He was just as involved as Harshad Mehta but he knew how keep out of the hands of the law. Nimesh Shah still deals in the stock market and is known to be a heavy player. Harshad Mehta is now dead. It is rumored that when he died, he still had 10% of ACC shares with him.
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{ 3 comments… read them below or add one }
It s so nice and help me to teach my students……………
very nicely written..simple and clear ..will never forget this thing for the rest of my life… but i have read in several places that he had siphoned off money from SBI rather SBI was in a big way involved in it .. cn u please make it clear ?
I dont think Mr Harshad Mehta done froud with any body if he use his mind and make profit then wt,s wrong where is govt. and Sebi that time, Govt is also responsible for that becouse govt had a loop point for invest in bonds and they cheqe it only weekend The banks at that time were not allowed to invest in the equity markets why now and banks are also responsible they want more return on public money. Mr Harshad Mehta gave retuen to bank 15% then where he was froud.
Mr Harshad Mehta was a gennius person he gave govt a new strategy to earn money from public and invest in share market and no gurrantee of retuen but Mehta gave return to bank 15%. But his fault is that he was more capble, clever, genius & better than Govt and SEBI
I dont know all history of Mr. Mehta but he had a great mind he done that which all person want to do high return with other money. He had done business without own money and made large profit, companies also do that public ka paisa or loss hua to insolvant verna profit in pocket money now all insitution do that which he done, LIC Aviva etc all these company collect