Before his involvement in the scam, Harshad Mehta rose to fame in the stock market as a "Big Bull" due to his uncanny ability to predict market trends accurately.
The "Big Bull" Strategy
Mehta's modus operandi involved manipulating the stock prices of certain companies, primarily using the ready-forward (RF) deal method.
Astronomical Market Rise
During the scam, the Bombay Stock Exchange (BSE) Sensex skyrocketed from around 1,000 points to a staggering 4,467 points within a year, mainly fueled by Mehta's manipulative activities.
The Fake Bank Receipts
Mehta employed a network of brokers and traders who helped him create fictitious bank receipts, leading to a false impression of enormous funds available for investment.
Massive Financial Gains
Mehta's illegal activities helped him accumulate vast amounts of wealth, including luxurious properties, a private jet, and a fleet of fancy cars.
Temporary Market Crash
The exposure of the scam resulted in a significant stock market crash, wiping out billions of dollars in investor wealth and leading to a severe economic downturn.
The Harshad Mehta Effect
The scam prompted significant reforms in the Indian stock market and financial sector, leading to the establishment of regulatory bodies like the Securities and Exchange Board of India (SEBI).