capital Market scaM
The capital market is the market for securities, where
companies and govt. can raise long term funds. It is a market
in which money is lent for periods longer than a year. The
capital markets included the stock market and the bond
wHat is capital Market scaM?
It is basically fraud done in the capital market with the
investors by manipulating the facts in order to attain
Who is this man?
Started his career with new India assurance co.
Quit his job in 1981 to become a sub- broker.
Went bankrupt in 1982 & recovered soon to become more
Went on to become one the most successful broker- the
rags to riches story, thereby earning the nick name of “THE
What Was the scam all
Diversion of funds
Use of ready forward(RF)to maintain SLR
(statutory liquidity ratio)
explain the loophole in the
He targeted a rise in the Bombay stock exchange in the
year 1992 by trading in shares at a premium across many
Taking advantages of the loopholes in the banking system,
harshad and his associates triggered a securities scam
diverting funds to the tune of Rs 4000 crore (Rs 40 billion)
from the banks to stockbrokers April 1991 to May 1992.
How it was done & role of
tHe broker ?
Mehta soon mastered the tricks of the trade by
managing several brokers and set out on dangerous
game plan. Mehta has siphoned off huge sums of
money from several banks and millions of investors
were conned in the process. His scam was exposed,
the markets crashed and he was arrested and banned
for life from trading in the stock markets.
bankers, financial institutions,
He was later charged with 72 criminal offences. A special
court also sentenced sudhir Mehta, harshad Mehta’s brother,
and six other, including four bank officials, to rigorous
imprisonment(RI) ranging from 1 year to 10 years on the
charge of duping state bank of India to the tune of Rs 600
crore (Rs 6 billion) in connection with the securities scam
that rocked the financial markets in 1992. He died in 2002
with many litigations still pending against him.
His favorite stocks included
Tata iron and steel co.(TISCO)
The end of The bull sTory
Lifestyle (flashy cars & life like a celebrity).
December 2001- the death of the bull.
Forever remembered as the architect of the
Rs. 50 billion scam.