Unraveling the 1992 Harshad Mehta Scam: A Detailed Exploration
Friends, you people demanded through comments to unveil the 1992 scam. Although many people have already made videos on this, but I have brought this series for you by explaining it in detail. So without wasting time, let’s start the story. In this world before mobile internet and social media, everything was going very slow, whether it was the country’s economy or paper work in government offices or any breaking news. If there was any speed, it was in the Bombay Stock Exchange, where the common man was trying to change his fortune through shares.
Then came a day that shook the foundation of India’s economy. A day before that, i.e. on 22 April 1992, a man named Sharad Bilhari, who worked in India’s largest bank, State Bank of India, goes to the office of The Times of India and meets Suchita Mam, who used to handle finance news. Belari was very nervous and tells Sachita that madam, there is a big scam going on in SBI.
A big fraud has happened with SBI, then he closes the office door and tells that the entire fraud of 500 crores is 500 crores missing from SBI’s books, payment was made without bank receipt. Madam asks, do you know how big is this fraud, who did this fraud, nervous Belari says Harshad Mehta.
In 1992, Harshad was India’s biggest tax payer, his personal holding was 4000 crores. Today, perhaps this number may seem small to you, but 32 years ago this number was very big. If that amount is adjusted according to today’s inflation rate, then this number will be more than 200 thousand crores. Now the question is how did a boy from a lower middle class family make so much money?
Harshad was weak in studies but was very good in cricket. His father had a textile business which failed, so Harshad did every small and big job to run his house. Harshad used to work for Rs 600. After marriage, his responsibilities also increased and so did his restlessness. Harshad’s small family was very happy in this small house but Harshad had to get out of this small house.
He often used to share his thoughts with his brother, he tells his brother that Jignesh is earning a lot of money in the share market. His whole family has gradually come into this line. His mother has become rich at the age of chanting the rosary. Then the next day he tells his brother that I want to enter the line of share market. I want to take risk, if there is risk then there is love.
His brother explains him that this path is not so easy. Then his brother Ashwin sends him to a broker and tells Seth ji that I want to become a jobber. I understand the business very well, I am just new to this market. Then the Seth asks him to dial a number and says that he will not ask again. Harshad orders one plate of Bhindi, one plate of Gatta, one Rajwadi Kadhi, Jain Khichdi, two rotis, two Bhakri, two Papad, one Roasted, one Fried, one Onion, Tomato Salad and one Raita and gets the same order noted without asking again.
Then the Seth asks him to cancel all this because this was Harshad’s test. Because during market time, when the clients will ask him to buy shares in a hurry, he will have to buy them without asking again. If he asks again, then the rate will be out in this time. Then the Seth asks him to come the next day at 9:00.
The next day when Harshad comes in the morning, he sees a big giant Black Cobra outside the market. Then Bhushan comes there and tells him that the person whom you are staring at with wide eyes, his real name is Manu Mundra but in the market everyone calls him Black Cobra. When the market goes into recession, he benefits the most.
Bhushan Bhatt was sent by broker Lal Sahib. Bhushan entered Harshad’s horoscope in such a way that he never came out of it till his death. Then Pranav Seth comes there, then Bhushan introduces Harshad to Pranav Seth but he does not shake hands with Harshad. Bhushan tells that he is one of those people who take the market to the top.
This is the broker street of India. Here, whether a bear hits down or a bull throws him up, when a man gets hit by them, he falls straight on the ground. That is why no cleverness will work in the market. Then Bhushan explains him the hand signals by which the clients signal to buy shares. The most crowded area will be ours and the least crowded area will be Chiller Party’s, we should not go there because we deal only in big stocks. Keep your eyes, ears, nose, everything open.
When the market starts, Harshad gets a very good feeling but he was not able to understand anything. Then Bhushan comes and tells him that if he does not buy or sell anything, he will be out on the very first day. Then such a scuffle for the lions begins there that you would have never seen even in a vegetable market. In the evening, Seth ji scolds him because he had sold lions worth 25000 and the client said that he had bought lions worth 23000. It was a loss of 2000. Harshad says Seth ji, whatever loss you have incurred, deduct it from my salary.
Sethji says that he will get salary only when there is profit. Then Harshad asks him for one more chance. Then after going outside Bhushan tells him that Sethji was not going to fire you anyway because selling shares worth Rs. 25000 is not a child’s play. He will not let you go just like that. You just keep scoring goals. Harshad was only looking at one thing, the arena of BSC. He again entered this ring in such a way that in a few years he became the best jobber of the market.
Then one day while drinking tea his eyes fall on the newspaper. He tells Bhushan that the Premier car makers are increasing the rate of their cars. That is why Premier Auto is going up. Those who had this news printed money. This is called insider training and it was illegal in India. Now Harshad also gets the urge to play this game. Then he goes to the factory where the workers were on strike.
There he comes to know that all the trade unions work on the orders of Doctor Dada Setam. Then the doctor goes to Dada Setam and tells him that Premier Auto has increased the price today but its share has been rising for the last one week. Due to which neither you nor the workers have benefited. I have come here only to talk about the benefit of you people. Then he tempts the doctor that if I get to know the things inside the factory, then whatever profit I make, a part of it will be yours.
Then his brother explains to him that do not get involved in insider training. If anything goes wrong, the big people will not leave you. Then Harshad used to target the shares of the companies from which he got insider information. If the news was negative, he would offer them at a lower price and buy the share again when the price of that share fell. Whether the company made a profit or a loss, Harshad’s profit was the only profit.
But Harshad was not satisfied with the money he got from this commission. Then one day he tells Bhushan that now the time has come to open my own trading account. I did not come here to do a job, I came to learn. He learned as much as he could. Then he opened his own trading account with his brother and took his parents to a five star hotel for dinner. His father scolded him that what new mess have you people started by leaving your good jobs.
Harshad says that I make money for others by using my own brain. Now my own brain will work and I will make my own money. Now the day had come when he left this small house and shifted to a bigger house. His friend was very sad because of his departure. Harshad explains to him that he is leaving home but not leaving friendship. If you ever feel like it, come and meet me in the share market. I will earn you as much in a month as you earn in a year.
Then one day he and his brother write down the names of low priced lions. Ashwin asks why are you choosing a lion worth ₹. Then Harshad says that firstly these lions will come in bulk for less rupees and then we will spread such news about it that everyone will run after this lion. When the price goes up, they will get out of this lion. Then they choose a lion named Alwar Pharma.
They had 20000 to buy it but had to arrange for 20000 more. Then he goes to Pranav Bhai. Pranav Bhai did not give him any price even today. He meets Pranav Bhai again the next day. Pranav Bhai says that money attracts money and loose change attracts loose change. Harshad says Pranav Bhai, just like you can smell the fragrance of notes, I can smell the fragrance of the lion. Then Pranav Seth agrees to support him.
Now the news of Alwar Pharma is spread everywhere. One broker to another, the second broker to the third, everywhere the name of Alwar Pharma was in discussion. That day Alwar Pharma was being sold like vegetables in the share market. Whenever the price of Alwar Pharma is told before the market closes, the rate comes out to be ₹1 50 paise for selling and ₹ for buying. Money tripled in a single day.
After this win, Harshad became Pranav Seth’s favourite. Then he tells Pranav Seth about two more shares and offers 50-50. Pranav Seth agrees. Then on 18 March 1982, Harshad buys a car for himself. Now the rest of the brokers used to ask Harshad for tips on what to buy and what to sell. Then they hear a voice that the market has crashed. And they are shocked to hear this.
Ashwin comes and tells Harshad that his 10 lakhs have been invested. Someone changed the game in just half an hour. The market has fallen more than 8. It is heard that Ajay Khadia from Kolkata has sold shares in bulk. This crash had crushed all the small brokers. It seemed that Harshad’s innings would end here. But the match had not even started yet.
22nd April 1992 is the day when Sharad Ballari came to Suchita mam to give her the news of Harshad’s scam. He runs away out of fear before the tea arrives. And with this the first episode ends.
In the last episode you saw that the market crashed in which Harshad and his brother lost 10 lakhs. Right now in their house only Harshad’s brother Ashwin’s wife used to earn money by working in a beauty parlor. Ashwin tells his wife that he has also got a job but both of them were confident that Harshad will set everything right again.
Harshad had a debt of 10 lakhs out of which he had paid 3 lakhs which he had earned in 3 years. 7 lakhs were still to be paid to Suresh bhai. Then his father went to Suresh bhai with his ancestral jewellery and house papers.
Harshad says Suresh bhai please get my trading account opened. This will help me to repay your loan quickly. But Suresh bhai says that the share market is not so easy that you have to go there and withdraw money. Until the entire money is received the trading account will remain suspended. Then at night Harshad’s father comes to explain to him that you do everything the opposite.
You dream during the day and stay awake at night. Now they will not let your account be opened so soon. Harshad says Papa you are afraid that you may have to leave Mumbai and go back to Gujarat. His father refuses. Harshad says one should never lie to the night. All the secrets are known at night. Then his father laughs it off.
Harshad says Papa I am not going to give up BSc so soon. You go and sleep. Harshad did not know that today his Baba is talking to him for the last time. The bitter truth of the world is that fathers are often consumed by the grief of their children. Something similar had happened here too.
After a few days, when both the brothers were sitting at Vafadar Tea House, Ashwin says, I am getting a job in Sri Lanka. I am thinking of going there. Harshad says, then you also want to leave me and go. If I had money in my hand, I would have played like a gawaas karr in B.Sc. Then a broker comes there. He says, Harshad bhai, I made a lot of money in the tip you gave last time. Now that your money is gone from the market, you should give me advice, brother, so that my pocket remains full.
Just then Harshad gets an idea. He says, now I will start a consultancy. If I earn 10 out of 5 from someone, then I will definitely get 5 paise in commission. Then they open a company named Gromore and go to their first goat whose name was Dhruv bhai. Both of them take Dhruv bhai under their wing. Dhruv bhai was ready to invest up to 1 lakh.
Then Ashwin tells Harshad that his father-in-law has got 45 lakhs of PF. He gave that money to me and I kept it. Now Laxmi Mata herself was coming to do tilak, so who will refuse. Then they go to Suresh Bhai. They make Suresh Bhai deposit some more money. Suresh Bhai asks what is the plan for the future. Now you people are investing, so you will also need a broker.
Harshad says that we will all become brokers somewhere. Suresh Bhai says why somewhere else, why not with me. From today your trading account is open. Now they all needed an office for themselves. So where their father had rented a shop, they go and rent the same shop.
Then Lala says your father used to give me ₹. Now it is a matter of our family, you give 500 and deposit 5000. After a few days Harshad does research on tea at home and tells his brother that most of the tea is cultivated in Africa and this time the crop has been spoiled there. So the demand is going to increase in India. Now we will invest money in tea shares.
Then they interview new staff for their office. They choose a man who had his own typewriter. Then Harshad gets him to type a letter inviting different people to do business with him. Some people joined them and some did not.
Then he explains to one of his friends about short selling in the share market. Suppose we sold a share at the price of 1000. Now we do not have that share. We did the deal in advance. Now when its price will come down, suppose the price came to 800 and we bought that share, our profit was ₹ 2000000 per share. Through this trick we can earn money even from the falling market. We just need to know the details of that company and the profit loss.
He assures his friend that with closed eyes, whatever share I tell you to invest money on. Then Pranav Seth explains to him that nothing is going to be made by opening small accounts of these three-four families. You want rich pigeons of a rich father but they will not come to your poor pigeon house. Seeing your poverty, their wealth will bother them.
Then Pranav Seth introduces Harshad to some of his rich friends. He says don’t think too much. This is Kapil Dev of B.Sc. Then he takes Harshad aside and says keep these 40 thieves engaged. I have made some more arrangements for them. He had called girls for everyone there. Then seeing them, Harshad slips away from there.
The next day Pranav Seth scolds him and says that rich people like such a life. So if you want to make friends with them, then you will have to do all this. Harshad says we are family people. We can’t do all this. We know how to do business. And the thing about business is that those 40 thieves of yours have given cheques to do business with them.
Pranav Seth says that now no one can stop Growmore from growing. During those days, Suchita Dalal madam got a job in the finance department of The Times of India. Then her boss makes her meet Debo Shash and tells her to show her the Bombay Stock Exchange. Then he takes Suchita mam to the BSC building and tells her that reporters from other newspapers also come here.
They give some news to them and take some news from here. This is how the household runs by sharing. Just then Harshad and Ashwin come down from there. Today again some stock had taken over their business. Then Ashwin says that both of us will not be able to handle all the work. We need someone who can handle our accounts and back office. Who also knows how to play in the ring. Then Harshad goes and meets Bhushan Bhatt.
Bhushan did not want to leave his job. Then Harshad talks about making him his partner. Bhushan likes his talk. So he shakes hands with him. At the time when Suchita Dalal was understanding the game of lions, at that time Harshad was busy making this world his own. Now his eyes were not on the game but on the entire field of the game.
But there was also a black cobra in the field i.e. Manu Mudra. The mere speaking of Manu Bhai would cause turmoil in the share market. But there was also a mongoose in the market who was giving competition to that cobra. His name is Harshad Mehta. Now the time comes on 31st October 1944. In the evening, the news comes that Prime Minister Indira Gandhi is no more with us. According to reliable sources, Rajiv Gandhi will be the next Prime Minister. This news was shocking for everyone.
On one hand, thousands of people were dying in riots in the country, on the other hand, Rajiv Gandhi was being handed over Prime Membership on a platter. No one believed that how a pilot would handle this country just because of his name. Black Cobra was also confident that Pilot would be out of politics within two-three months.
That is why he asks his men to move quickly and take a position in the recession. Pranav Seth also realized that the index is going to hit the ground very soon. But Harshad says that Pranav Bhai, this is the time to buy, not to sell. This pilot is going to fly very high and so are we. Then he tells Pranav Seth about two-three petroleum shares which were getting very cheap prices and in the coming time, they were going to go very high.
Pranav Seth says that the country is burning and you think that the price of petrol will increase. Harshad says that Seth, both driving and burning require fuel. Next day when the market opens, Bhushan tells Harshad that Cobra is going to exit Indral shares. The market may crash. Harshad says that even I will not let the market crash. Then he tells his army to tell all their clients to buy Indral.
Then he and his team start calling their clients and tell everyone to buy Indral shares. Now in the arena, Cobra’s men were happy after selling Indral shares. Then Harshad tells the rest of the people to pick up Indral too. Now let’s see whether Cobra wins or the mongoose.
Cobra’s men start selling. When Cobra comes to know about this, he asks who is in the mood to buy. LIC, UTI or Ambani? His men say that Harshad Mehta is giving returns of 60-70% to his clients. Cobra says that it is okay, let the time come. We will bring it down too. Now the time comes on 28th February 1986 when the Finance Minister Shri Vishwanath Pratap Singh presented the budget of India.
For 16 months Harshad had only done shopping in the market. His favourite shares were Indral, Jwari Agro and Speik. The promises made by the government were not even mentioned in the budget. Now as soon as the bull weakens, the bear wakes up. Now Manu Mundra got a chance to attack Harshad. He knew that the more Speik falls, the more Harshad will suffer.
Manu Mundra says that if you want to bring down Harshad then bring down his reputation. If you cannot spoil anyone’s work then spoil his name. Spread a rumour among his traders that Harshad has suffered a loss of more than 1 crore in Speik. In panic, his traders will sell the shares they hold and the market will go into free fall.
Just then a reporter comes there and tells Harshad that Manu Bhai’s people are trying to tarnish your name. I have heard that tomorrow you will not even get a chance to sell shares. But Harshad and his brother were living in their own ego that the world does not have the power to shake us. Now they were not afraid of Manu Bhai but of those weak hearted traders who will listen to Manu Bhai.
Then Harshad decides that we will clear our dues 14 days in advance. We will spread the news in the market that forget about loss, Money More is in such a profit that it has paid its dues in advance 14 days in advance. Then he himself goes to meet Maya Bhai, the executive director of BSC. There he clears his dues 14 days in advance.
And they request him to put up a notice so that people can know that Gromore is in profit, not in loss otherwise the entire market will suffer loss along with us. Then they send Bhushan to the loyal tea seller and say that Harshad Bhai has paid for today’s tea. Do not take money from anyone, including the tea seller. This news reaches all the traders that Harshad Mehta is the Bachchan of BSC. Now it spreads in every nook and corner of BSC that whatever Harshad Mehta says, he does it.
Now only one thing sticks in the mind of every jobber and broker, Mehta na rajma market mazama. Now let’s see what happens in the next episode.
Harshad Mehta had saved his name in the 1986 crash but he had also realized that he would not be able to do business on a large scale by investing his own money every time. Now big funds would knock at the door of Harshad Institution Broking.
And only one man could open that door. UIT chairman AJ Ferwani. Before the era of the original Big Bull mutual fund, there were only two places for people in India to save tax, LIC and UTI. Long term investors used to choose LIC. But UTI also had a fund of 00 crores to invest in the stock market.
Whenever UTI used to make a purchase, the stock market used to start running. Then when the Meta brothers go to meet Ferwani, he refuses them saying that I do not trust you people. I know there are some people who are spoiling the entire market. You people are also one of them. I cannot break the trust of my users.
Then at night Harshad goes to a party with Pranav Seth. He tells Pranav Seth that UTI has not given a single rupee in the business and I am also tired of working for this brokerage of one and a half taka. UTI has so much money but there is no plan. Then AK comes there i.e. Ajay Kedia.
When he was talking with Pranav, someone calls Pranav from behind. Then he gives his glass to Harshad and leaves from there. Then when AK starts leaving from there, Harshad introduces himself to him and says that ever since I have come in this line, I have heard a lot about you. Then he gives his business card to AK.
AK leaves saying that if he stays in the market, then he will definitely come someday. Then he puts Harshad’s business card in the waiter’s plate. Harshad feels bad about this. Actually Harshad did not drink alcohol but today he drinks alcohol out of spite.
Then when Pranav comes there, Harshad says who is this Kedia and why is he so full of attitude. Pranav Seth tells that the share market belongs to his father. He runs four companies. One of his feet is in the share market and the other in the money market. Today was the first time Harshad heard the name of money market.
The total volume of share market in one day was 10000 crores and the volume of money market in one day was 2 lakh crores. That is why Ajay Kedia’s attitude was on cloud nine. Now Harshad had to enter the money market. So he finds out everything about it, what it is. Then Harshad explains to everyone that there is not much difference between share market and money market.
The only thing is that the transactions between banks are not in shares but in PSU bonds and units. Just like share market, there is a broker in money market too. The broker understands how much money which bank needs and when. The broker’s job is to fulfill the demand and demand. SGL notes are necessary for every transaction.
A bank takes SGL notes in return for whatever units it gives to another bank and those SGL notes have to be deposited in RBI’s Public Debt Office. There, the accounts of all the units of all the banks are maintained. Now something even faster than SGL had come and that was BR i.e. Bank Receipt. Now a bank could make payment to another bank in exchange of BR.
After gathering all this knowledge, Harshad and Ashwin go to the country’s largest foreign bank, Citi Bank. There they meet KS Tyagi. Tyagi says that you are new in this line. Go and learn first. We already have brokers. Why would we leave them and deal with a new broker? There is no place for new people in this market.
Then after getting rejected from there, Harshat goes to meet Neeraj Chopra at Bank of America. But after going there he comes to know that Mr. Neeraj Chopra is going to Madras today for some important work. Then Harshad books a ticket for himself and catches hold of Mr. Chopra in the flight to talk about business. There was no better place than this.
Mr. Chopra tells that Citi Bank rules here. That Tyagi doesn’t even let our bank’s turn come. Then Harshad says that I will bring a deal for your bank. You just keep showing me the way. How to deal with Tyagi’s broker is my job. Then Neeraj Chopra introduces Harshad to other banks as well.
Harshad says that all of us small banks have to unite and become a big force and stand firmly against Citi Bank. Once his web is broken, I will never let him weave another web again. Everyone agrees. Tyagi and AK also come to know about their coming together. But they take it lightly because Citi Bank was the don of the money market.
Now those banks had also started getting business but even now their volume was nowhere near Citi Bank. Harshad says that now the time has come that we should go to the father of Citi Bank in security dealing. All the banks in India have only one father and that is State Bank of India i.e. SBI. Then both the brothers go to the head office of SBI.
Harshad goes there and explains that foreign banks are printing a lot of money in the money market. Now the time has come that we should bring our Swadeshi bank in line with this. I will bring bonds of all the small banks around here. All the deals will be crystal clear. Manager Khima says that we have also done some research on you, you have suffered huge losses in the market.
But it has also been heard that you have never let any clients suffer any loss. You are a man of integrity. Today we are not meeting you to play safe, rather we want to change the image of SBI. These foreign banks have been looting people for years in connivance with brokers. Now the time has come to set our house in order. Now SBI agrees to work with them.
Now Ajay Kedia was worried that Harshad is now taking position in the money market as well. He has also joined hands with SBI and Ajay Kedia gets scared on hearing this. He says that we should keep an eye on every transaction of Harshad. Pranav Bhai was engaged in taking ACC to the top and the Cobra gang was engaged in bringing it down. Now Pranav Bhai needed funds.
Ashwin explains to Harshad that if you want to enter the market then do it but do not go after ACC. Funds have to be transferred from one bank to another within 15 days and Harshad talks of depositing the cheque in his account and moving the funds in the share market for 10 days. Ashwin stops him. Harshad says that this money will rot in the accounts for 10 days. If it goes to the market, it will attract more money.
In 1990, Harshad had returned to BSc. He made his first move on ACC. The Cobra gang had no idea that this time Harshad had not money but Kubera’s treasure. In security dealing, banks used to deposit money in the brokers’ accounts so that the right deal could be found at the right time. Harshad had now started investing the money lying in his account in the share market.
Harshad could increase the price of any stock by using this fund. He took ACC to great heights. By investing the bank’s money in the share market, he had accumulated a lot of wealth. Banks were also getting the best deals. Harshad was making profits from all sides. It seemed that he was not in the money market but in the money making market. When the Sensex was at 1400 points, Ajay Kedia started short selling.
At present the Sensex was at 1600 points and he suspected that Harshad was investing the bank’s money in the share market. Then Tyagi says that to stop him, we will also use the bank’s money in the share market. Now Harshad needed 200200 crores. Then he goes to a lakh bank and tells the manager that he will bring back ₹2000000 BR and give it to him and will give him a commission of 4 crores for this work.
In those days, at the end of the 90s, India was struggling with an economic crisis. That’s when the Reserve Bank of India entered the market. They started smelling fraud in the banking line but that was the era of files. When it took months to find even one transaction. RBI governor orders to check the security departments of Bank of Baroda, United Bank of India, Bank of India, Canara Bank and Indian Bank.
And to avoid Citibank getting angry, he asks them to give an informal warning. He says that all of them should be audited. Not investigated. This news should not reach the press in any way. But somehow this news reaches Suchita ma’am. Now madam was a new recruit in The Times of India.
So she wanted to get the attention of the boss. But her boss Rajdeep refuses to publish this in the newspaper. Because these people did not have full details. Suchita insists a lot with Rajeev. Then he says that if not on the front page, we can publish a small news on the financial page. Then when RBI governor comes to know about this news.
So he says share a news with the newspapers that RBI is going to issue a strict guideline related to BR used in the bank. The next day, an employee of Citibank goes and tells Tyagi that RBI’s new guideline has come. All banks will have to issue BR in one day. Now the hassle of 10-15 days is over.
Now the bank will not transfer money to any broker’s account. Tyagi says forget these guidelines. This is RBI, not CBI. Who will follow these guidelines? In the next scene we see Suchita going to meet her asset who told her the news of RBI’s BR. This news was completely suppressed by RBI.
His own son whose name was DT was a broker in the money market. But till date he had done only one or two deals. Then after leaving from here, Suchita goes to DT but he drives her away from there. On the other hand, Harshita goes to Chairman to supply the loan. But they refuse to give him the loan because they did not have that much funds.
Then Harshad says that if I bring big clients to you who put funds in your bank, only then you can give me the loan, right? The chairman agrees. Now Harshad knew very well what to do for his benefit. Then he got a nice suit made for himself in Amitabh Bachchan style.
Because he was also the Amitabh Bachchan of the market. Then he goes to the ONGC office and meets Mr. Nolkha. Harshad says that my job is to make money for everyone. Even if it is the government. But Mr. Nolkha refuses to invest government money in the share market.
Then Harshad says that you should invest the money in the bank’s PMS scheme. They agree. Now Harshad had a source of money that no one could even think of. Now along with ONGC, money from the accounts of Coal India, NHPC, NTPC and IRFC also started getting invested directly in the bank’s PMS.
And from there the money went directly to the share market. Now Harshad had become a legend of the market. The market’s trend would change at his one signal. Because of Harshad, even the sagging companies like Mazda started gaining value. But 1991 was a strange time for the Indian economy.
The Chandrashekhar government fell amidst the economic crisis. But the next election was fought on the Mandal-Kamandal issue. It was difficult to predict the election results. But after the first round of voting, Prime Minister Rajiv Gandhi was also assassinated. And when the election results came, PV Narasimha Rao’s government came to power. But the share market was not affected by all this.
Because Harshad had taken the index to the heights of the sky. Now there was no one to stop him. Harshad was the first person who had earned so much money in the share market. Now his life had started becoming like a film star. Now every person wanted to become Harshad Mehta. The market index had increased to 2000. Now whenever he went to a wedding or any function, people would talk to him only about the share market.
Now people had also started taking autographs from Amitabh Bachchan of this market. One day Harshad goes to buy an imported car for himself. The dealer says that it is difficult to buy an imported car because only one car comes from Dubai in a month. A Lexus is coming next month but that too has been booked by Ajay Kadia for ₹ 5 lakhs.
On hearing his name, Harshad says that the car should come directly to my house. I will give you 55 lakhs. 45 for the car and 10 lakhs for your word which you have made with Kadia. Harshad already had 15-20 cars. Now another new car comes to his bungalow. His brother Ashwin was not happy with his extravagant spending. But even after earning, his brother was giving it. That is why he does not say anything to him.
Then at night Harshad gets a call from Swami ji from Delhi. He thanks Harshad because Harshad had given him a huge donation during the elections. Swami ji says that if ever you face any trouble, we will be happy to help you first. Now let’s see what happens in the fourth episode.
In the fourth episode, we see DT calling Suchita ma’am to meet him in the hotel. He says that we are going through an economic crisis. Government change, Prime Minister change, everything change but the stock market is absolutely stable. Everyone is making profits. This is a good thing but don’t you see something fishy? I see Harshad Mehta behind all this.
He is the one who has saved the market by investing huge funds in the market. Suchita ma’am asks from where is he getting so much funds? DT tells that the Delhi government is in his pocket. He dials the number there and his friends call government companies and give him huge funds to invest in the share market. He is filling the pockets of bank officials and taking loans from them as per his wish. Last week UCO Bank has given a clean credit of 50 crores to Harshad Mehta without any collateral.
Suchita Madam says do you have any proof? Because without proof we cannot print anything. DT says I will try, maybe I will get something. On the other hand Harshad goes to meet Sardar ji of Polo company. His share was running around -2 and he expected that the rate of his share should be around 40 to 50.
But Harshad promises him that I will take your share to 400 and whatever profit will be there, we will share it half-half. When he goes home, at night his brother asks him that you have promised but from where will we get the funds? Harshad says we will make some arrangement. Now the time has come when we will have to launch IPO of our own company Gromore. How long will we wander here and there for funds. But Ashwin leaves with a frown because all this seemed like a pipe dream to him.
Now 5 months pass. The people of Cobra were sitting in a bar and talking among themselves that the price of Polo is going to fall. They were also engaged in improving their relations with other banks so that they could bring Harshad Mehta down. And on the other hand Suchita Madam also wanted to bring Harshad on the road in collusion with Debo Sheesh. Now the price of Polo had fallen from 230 to ₹. Both Mehta brothers were worried that we have bought maximum shares, then who is selling these.
Just then a courier comes to them. By looking at it they come to know which bank has sold the shares. Then Ashwin says let’s go and catch him and says take your money and return our shares. But Harshad says let them sell. We will not do anything for the next two months. They should feel that we have run out of funds. Then after seeing the right time, I will put such a bamboo that all their screws will get tightened.
Now Harshad had to arrange for a huge fund. Then he meets Sitaraman, an employee of SBI. His job was to get the BR by giving the bank’s cheque to the broker. He brought a cheque of 499 crores to Harshad. In return, he asks for BR from Harshad. Harshad says it is a matter of three-four days, I don’t have to keep this amount forever. Then Sita Raman says after getting BR, I have to enter the entries in the accounts.
Then Harshad laughs and says, you take a lot of tension with you people. I am not doing the first deal. This is a small amount for me. I will also take some shares in your wife’s name. Sita Raman becomes happy. Now the news reaches the RBI Governor that no one is following our guidelines. No one is ready to take us seriously, especially SBI.
The RBI Governor says that I will talk to the SBI Chairman myself. On the other hand, Suchita Madam was busy gathering proof against Harshad. But she was not getting any proof anywhere. DT also did not want to let his name come forward. On the other hand, when Ashwin comes to know about 500 crores, he scolds Harshad that how did you take such a huge amount from SBI without a bank receipt?
Harshad says this is not the first time I am doing this. I will get a BR from some bank and give it to you. Ashwin says the way you are working, you will get caught one day or the other. Then Harshad gets angry and leaves from there. Now the time was January 1992. Harshad was playing a match and his family had come to watch the match. Bhushan had also come to watch the match with his wife.
Then his wife says to him that you have got the papers signed by the person whom you call partner all day? Or you are a partner only in name. Then when Harshad gets out, Bhushan goes to him and says that you are playing the match and everyone in the market is calling you a partner. Harshad asks what are they saying? Bhushan tells that everyone thinks that you are taking polo to an illegal level. Everyone was talking about setting up an inquiry.
Then Harshad gets an idea after seeing an ad in the paper. The next day he calls reporters from big newspapers to his office and gives them an ad to print about him. He had printed Harshad Mehta is a liar because he has made more profit than what he had promised to the investors. Now Harshad did not have to run, he had to jump straight.
Then Bhushan explains to Harshad that do not play with people’s trust. After Harshad’s news was published, the market was also growing day by day. Whoever invested money in Harshad’s shares earned profit. Now everyone wanted to be special to Harshad. Now Harshad was taking the market even higher by getting his own news published. The price of Polo had crossed 350.
One night Harshad goes and tells his mother that your son has become a bigger tax payer than Dhirubhai. Now see how many doors of earning your son opens. Now your office will never be locked. In the next scene we see Suchita Madam taking Debo Shish to an old building and telling him that Harshad made Mazda Industries’ shares reach a position in the market which it did not deserve.
He took its price from the road to the sky. That too with the help of false news. Because Mazda Industries’ office was in this building which was locked for years. She wanted to prove that Harshad is smart as well as crook. Then the next day’s newspaper again comes the news Harshad Mehta is a liar and this news was published by Suchita.
Then he calls Suchita to meet him in a five star hotel. He shows Suchita madam her salary slip and asks her how much money she will earn in 20 more years. Join me, I will make you live. Suchita says your name is running in the market as long as your sources of money are hidden. The day everyone comes to know where the money is coming from, you will fall straight down.
The next day a press reporter Jignesh calls Harshad and tells him that tomorrow morning income tax raids will be held in your house and office. Take care. Then he removes all the illegal things from his office. All the data that was in the computers was being transferred to floppy.
After that all the files and computers were loaded in a truck and shifted somewhere else and new computers were placed there. Then comes the day of 28 February 1992. Harshad was waiting for the income tax team. Then Ramanand Swami comes to his house with his team. He shows the search warrant to Harshad and says that from now on no one will come in from outside nor will go out from inside. From now on, I will receive any phone call.
Then the search begins in the house as well as in the office. Then a call comes from the office that we searched the entire office, nothing illegal was found. We have taken all their CPUs in our possession. Then Ramanand Swami says to seal the account section. Then he tells Harshad that until the investigation is completed, you cannot even touch the books. Then he seals Harshad and Ashwin’s office.
Now the stuff inside could not go out nor could anything go inside. Due to nothing being found in his office, his competitors also become sad. Let’s see what happens next.
The income tax officer did not find anything in the raid. But Harshad’s reputation was definitely affected. Then he gives a nice byte on the country’s economy and the upcoming budget and makes him feel as if nothing has happened to him. In the next scene, we see the RBI governor calling a meeting in Chennai.
He advises everyone that the stock market index has crossed 3000. I think it would be risky to work in it now. My advice to all the institutions is to sell their shares and sit down cool down. But UTI’s Ferwani does not like this because he was the real bull of the market who only knew how to buy. Not sell.
After the meeting is over, a man working in SEBI tells the governor that the institutions will not listen to you. The rumor is that they only listen to Harshad Mehta. The governor asks what is this SEBI doing. Then the man says what power does SEBI have. Then when the governor was going back to Bombay, Ferwani comes to meet him in the flight.
He says that it would not be right to tamper with the market at this time. The governor says that the banks’ money is being rapidly invested in the share market. Every share has become overpriced. We are having to get involved in this even if we don’t want to. It is a question of the country’s welfare. On the other hand, Ajay Kedia throws a party for everyone.
He had invited Harshad Mehta as well but he did not come. Then Cobra’s henchmen come there. They start crying their sorrows and say that if the market rises for another month, we will be on the road. Then Tyagi says that the RBI governor is after him. Let’s see if he can do something or not. Then the RBI governor calls tax officer Ramanand Swami.
Ramanand Swami tells that he had got the news before we came. That is why we did not get anything from his house and office. We took away his computers but they are also password protected. We have called an expert. Let’s see if anything is found in the computer or not. Then the governor asks if there is any other way to find the source of his money.
Ramanand Swami says his main account is in SBI. There has been a lot of transactions there. So if we can trail the money, I think we can find the real source. The next day, one of the governor’s employees shows him the details of Harshad Mehta’s SBI account. The entries in his account were of Rs 20-2 crores as if they were chiller entries. Apart from that, there were many big MMO entries.
In which some were of Rs 200 crores, some of Rs 185 crores, some of Rs 250 crores. Seeing these entries, the governor is stunned. Then he asks to share this statement with the finance minister and also with SBI chairman Goi Puria. The next day, when Harshad was bathing in the swimming pool on his roof, he gets a call from Sitaraman.
He says that there is a big problem, Sir, Goi sahab had asked for your statement. Because he had received an order from RBI. Please Sir, settle your account. Harshad disconnects the phone. Then Sitaraman goes to meet him. Harshad tries to convince Sitaraman but Sitaraman says, Sir, first give me 170 crores.
Because tomorrow is the last date. If this amount is caught, then you will have to give the second amount of 500 crores which you have taken 4-5 days ago. Then Harshad says that you will get 170 crores but forget about 500 crores for now. You had to go on a Coim tour for the child’s Munde, right? Go there without any fear. Then he asks Bhushan to arrange for air tickets and accommodation for Sitaram’s entire family.
Then Sitaraman goes to his office after the office closes. He changes the entry of an amount in Harshad’s file. Now Mehta Brothers and his partner Pranav Seth were worried about the RBI Governor. Because he was after their SBI account. Ashwin explains that before the matter gets worse, you should clear all the payment accounts.
Pranav Seth says that do one thing, go and meet the RBI Governor. Maybe the matter can be solved through talks. Then Harshad goes to meet the RBI Governor. Harshad tells him to give me some time. I will explain everything to you. But the Governor says that I do not want to understand anything. Then the Governor leaves from there saying that I am getting late for another meeting.
Today was 10 April 1992. Two employees of SBI come and tell their boss Khemani that there is an entry of 1744 crores in our book but RBI statement has come from PDO. According to them, we have securities worth 1600 and 170 crores. We were trying to figure out why there was a difference of 74 crores in the matching but we came to know that the statement that came from RBI was not of 1670 crores but of 1170 crores.
574 crores is missing from our account. Then Khemani looks carefully. There 1170 was overridden to 1670. Then Khemani asks to call Sitaraman. Another employee tells that he has gone on leave. Then Khemani says that go now and check his desk and his safe thoroughly. Then they check his desk and safe thoroughly but they do not find anything.
Then Khemani goes to his boss Sudhakar Rao. Sudhakar Rao says that cancel his leave and catch him right now and bring him here. Then the team goes to Plani near Coim Tour on 12th April 1992. Where Sitaraman had come to get his children’s head shaved. Then they search for him at every step and finally find Sitaraman outside a temple.
Then they take him to a hotel and ask him about the 500 crores. Sitaraman says that he has no problem. I have all his accounts written down. I just forgot to tell in a hurry. I will come on Thursday and tell everything. But his companions take him back today itself. Then when Khemani asks, Sitaraman tells that I do not have SGL.
Then Khemani says that look Sitaraman we have ₹5000000 crores. Then Sitaraman says that I have BR. Everyone is left breathless. Then he says that I do not even have BR. I mean I have BR but I do not have it. Mehta has everything. Then they go to SBI Chairman Goi Puria.
They tell him that Harshad Mehta had taken money from us to give to PNB but did not give them the money. That is why 500 crores were taken from our account. Goi Puria gets angry after knowing this. He says that I will directly talk to the Finance Minister and dismiss all the people involved in this fraud. The next day Harshad Mehta goes to meet Khemani.
He says that I have the BR. The day I was going to give it to you, there was a raid in my office and those people sealed my office. Now whenever the vigil of the income tax people is removed, only then I will be able to give you the BR. Then Khemani says that I have got securities worth 1700 crores for SBI. SBI has earned a profit of about 200 crores in this. Do you think I will run away with 500 crores? Please give me a week’s time.
If BR is not able to pay, I will return your 500 crores to you. When Tyagi comes to know about this, he calls Kedia and says that Harshad needs 500 crores. The market is going to go on strike for a few more days. So he will not be able to sell the lion and there is no one else except me who can give him 500 crores. Now the time has come to catch him by the throat. Then Harshad calls Swami ji at night.
Swami ji says you should be rest assured, your work will be completed. Then Swami ji asks Harshad to meet the man who had a 36 figure relationship with Harshad i.e. Ferwani of UTI company. Ferwani wanted to become an MP and Swami ji had given him the sweet lollipop of becoming an MP in return for Harshad’s help. Harshad returns the 500 crores to Khemani the very next day.
After getting the money back, the smile was not going away from Khemani’s face. Today was the day of 21 April 1992. When Harshad returned the SBI payment, Tyagi and Kedia were shocked. They could not understand how he had brought such a huge amount in one day. Then Tyagi said that he had taken 500 crores from SBI without BR. This is not a small matter.
SBI also wants to suppress this matter. We have to leak this information so that the fraud comes to light. And as soon as the news comes out, the market will shake and Harshad will fall straight down. Then they call their acquaintance in SBI. Sharad Bilari picks up the call. And this was the same person whom we had called.
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