HARSHAD MEHTA SCAM- BIG BULL SCAM

High profile stock broker

Transition from an ordinary broker to Big Bull

Studied in Raipur Quits his 1st job at the new India
Assurance company in 1980.
Became a well trusted sub-broker for stock brokers J.L.
Shah and Nandalal Sheth.
Teamed with brother (sudhir) to float a new venturegrow more research & asset management company ltd
By 1990, being a prominent name in stock market, he
buy the share associated cement company (ACC)
whose price rose from 200-9000 (4400%)
By 1991 , Mehta was named as Big Bull.

Transition from an ordinary broker to Big Bull

Studied in Raipur Quits his 1st job at the new India
Assurance company in 1980.
Became a well trusted sub-broker for stock brokers J.L.
Shah and Nandalal Sheth.
Teamed with brother (sudhir) to float a new venturegrow more research & asset management company ltd
By 1990, being a prominent name in stock market, he
buy the share associated cement company (ACC)
whose price rose from 200-9000 (4400%)
By 1991 , Mehta was named as Big Bull.

The making of the 1992 security scam

Took advantage of loopholes in banking

system & drained of funds from inter- bank
transactions.
Major strategy adopted was to bring huge
amount of shares at premium causing
SENSEX to rise drastically
Mehta was later charged with 72 criminal
offences over 600 civil action suits were
filled against him.

BIG BULL SCAMS EXPOSURE

The famous BIG BULL SCAM was exposed on
April, 23, 1992 when columnist Sucheta Dalal
wrote an article in Times Of Inida
The crucial mechanism in the overall scheme wasReady forward (RF)
In this huge settlement process, the buyer & seller
of securities were unknown to each other
wherease broker knew both of them
Another instrument used by Mehta & its
associates was- Bank receipt

Complicit lenders

Two banks namely Bank of Karad (BOK),

Mumbai & metropolitan co-operative Bank
(MCB) agreed to issue fake BRs to Mehta
Mehta used the money thus secured to
enhance share prices in stock market
The shares were sold for significant profits by
Mehta & earned huge profits
BR retired when it was time to return money
to banks

OUTCOME
After the exposure of the scam, several banks left holding
BRs which had already cost banking system an amount
of Rs. 4000 crore
Chairman of Vijaya Bank committed suicide for being
guilty of having issued cheques to Mehta
Mehta came with a comeback being a stock market
expert providing investment tips to people.
When he died in 2002, Mehta had been convicted in only
one of 27 cases filed against him
Mehtas advance tax payment after his tragedic
comeback in the year 1991-1992 was 28 crore