7 months ago

Harshad Mehta's Scam and India's 1991 Economic Reforms

Harshad Mehta's Scam and India's 1991 Economic Reforms
Architect of chaos: Harshad Mehta and the price of reform · livemint.com

Harshad Mehta was a famous stockbroker in India during the 1990s.

After India started economic reforms in 1991, many people, including those who had never invested before, put their money into the stock market.

Mehta became very successful and was known as the 'Big Bull' because when he showed interest in a stock, its price would go up.

However, he also did something illegal.

He tricked banks into giving him money using fake documents.

With this money, he artificially increased the prices of certain stocks.

When this was discovered, the stock market crashed, and many people lost their life savings.

Mehta spent the rest of his life fighting legal cases and died in custody in 2001.

This story shows that even when countries open up their economies, they need strong rules and enforcement to prevent fraud.

Key facts

Name
Harshad Mehta
Born
1954
Died
31 December 2001
Scam Amount
₹4,000-5,000 crore
Sensex Before Scam
4,467 points (April 1992)
Sensex After Scam
2,529 points (August 1992)
SEBI Established
1988 (Statutory powers in January 1992)

Sources

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