How did Harshad Mehta lose his money?

End of Harshad Mehta Era On 23rd April 1992, Suchita Dalal exposed Harshad Mehta scam and banks started demanding their money from Mehta as they come to know that the BR was fake. The stock market reacts to the scam and crashes badly and so, Harshad also makes a huge loss. Due to his loss, he unable to pay back to the banks.

How did Mehta take advantage of the loophole in the system?

There was a big loophole in the system and Mehta takes the advantage out of it. To buy more shares he needs capital that he can get from banks only. He gave a higher interest rate to banks, and ask them to transfer the money into his account.

Where did Mehta grow up?

Mehta, struggling with his crooked teeth (and a brain for sure) was growing up in the city of Kandivali, Bombay (then it was not called Mumbai, so please don’t yell at me!) until the family moved to Raipur, Madhya Pradesh (today’s Chhattisgarh).

What is Mehta’s lifestyle at Worli?

Mehta lived flashy lifestyle, bought sea facing penthouse at worli spanning 15,000 sq feet with golf patch and swimming pool, lifestyle enjoyed by very few during those times.

Did Harshad Mehta give bribe to Narsimha Rao?

In June 1993, they both made a statement in a press conference that Harshad Mehta gave Rs. 1 crore as a bribe to the prime minister Mr. Narsimha Rao which was clearly refused by Mr. Narsimha Rao.

What was the main purpose of the Harshad Mehta Committee?

The main purpose of that committee was to investigate how many people along with Harshad Mehta were involved in that scam. Along with these committees, CBI was also investigating. After 17 months of this committee, on 9th November 1992, Harshad Mehta got arrested. His account was got ceased along with his brother and his family’s accounts.

Which cement company was the major target of Harshad Mehta?

ACC cement was the major target of Harshad Mehta. He put that much funds into the ACC that the price of the stock rose from Rs. 200 to Rs. 9000 in just three months. The reason he gave for the rise in those stocks is ” Replacement Cost Theory “.

How did Harshad Mehta exploit the RF deal system?

Harshad Mehta noticed early on the dependence of the RF deals on BR’s. In addition to this, the RF deal system also placed a great deal of reliance on prominent brokers like Harshad Mehta. So he along with two other banks namely Bank of Karad (BOK) and the Metropolitan Co-operative Bank (MCB) decided to further exploit the system.

How did Harshad Mehta combat the bear cartels in the stock market?

Instead of having just two banks involved, there were now multiple banks all connected by a web of RF deals. Harshad Mehta used the money he got out of the banking system to combat the Bear Cartels in the stock market. The Bear Cartels were operated by Hiten Dalal, A. D. Narottam and others.