Harshad Mehta was a financial wizard who rocked the Indian stock market in the early 1990s. He was known for his innovative stock trading techniques and for his ability to make huge profits in a short period of time. Little did anyone know that his success was based on fraudulent activities.
In 1992, the Securities and Exchange Board of India (SEBI)
began to investigate the activities of Harshad Mehta. It was found that he and
his associates had manipulated the Indian stock market by using a bank receipt
(BR) scam. This scam involved illegally obtaining funds from banks by creating
fake bank receipts. The funds were then used to purchase shares in the stock
market, leading to a massive artificial inflation of stock prices.
The SBI scam caused a massive loss to the public exchequer
and led to a major financial crisis in the country. Harshad Mehta was arrested
in 1992 and later sentenced to five years in prison. He was also fined Rs. 40
crore for his involvement in the scam.
The SBI scam is a lesson for all investors to be aware of
the risks associated with investing in the stock market. It is important to
remember that stock market investments can be risky and investors should always
do their own research before investing.