The Biggest Scam of Financial Markets

In October 2020, scam 1992 was released as a major success, which highlighted the story of Harshad Mehta. This is the story where the ambitions of a man shook the entire financial markets of India. So what is scam 1992 all about? Is it possible for one man to commit such a big fraud alone? Let’s solve the mystery in this article?

Harshad Mehta

So let’s start with the background of Harshad Mehta. His full name is Harshad Shantilal Mehta. Born in Rajkot on 29th July 1954, Harshad was an ambitious child. His father was in small-time textile business. In his career, he initially started as a salesman at New India Assurance Company Limited. While doing this job, his love for stock markets brewed up. He kept changing jobs several times, by serving series of responsibilities at the brokerage firms. Slowly, he kept growing and by 1990, he became so famous that media started calling him “Amitabh Bachchan on Stock Market”
After doing the job for many years, he once decided to leave the job and become an entrepreneur. This was when he started his company “Grow More” with his brother. He actively started trading in 1986.

Scam of 1992

The scam of 1992 was first reported by Sucheta Dalal in the second quarter of 1992. This was unprecedented and “scam” became a buzzword back then.
At that time, brokers were not allowed to borrow funds from the banks. This is because that money could be used for manipulating stock markets and make gains. However, Harshad under the table colluded with the banks, showed them an opportunity to make a bonanza by investing in stock markets. This is how he, illegally started diverting the government’s banks’ funds to the stock market.
With this amount, he was able to control the market at his fingers and could make desirable gains for his company and clients.
Banks also gave some funds to traders’ accounts, so that they could use the trading opportunity and make gains for the banks. However, Harshad used that amount to manipulate the prices. However point to be noted is, this is not something Harshad was doing alone. Other brokers in the financial markets who had the power were also doing the same. RBI was aware of this, however, it didn’t do anything because of the structural problems in the markets back then.

Greed of Harshad Mehta

The growth Harshad Mehta was seeing in his career was infallible. He became so ambitious, that he didn’t even realize when he crossed the line. His aspirations grew, he became greedy and wanted to become the richest man in India. This greed made his ambitions do things that were irreversible and which would make his career fall for nothing. He took 500Rs crore money from one of the employees of SBI and didn’t issue requisite documents against it. He used that money, but unfortunately due to the closure of the stock market, at that time, he could not repay it. When this matter came under notice, an amount was missing from the books and Sucheta Dalal on investigations found about this and reported on it.
He took money from another bank to repay the amount of Rs 500 crores and then from the third bank to repay to the second bank. He kept doing this until CBI found about this and his career came to an end.


There are different views on this scam and this case could never be unwrapped properly. There were also political allegations made against then prime minister. Many experts still believe that Harshad just used loopholes in the system to his advantage. This is unethical but not illegal. Moreover, Harshad was not alone who was exploiting the loopholes. What are your thoughts on this?