Scam 1992

Scam 1992

The story of "Scam 1992: The Harshad Mehta Story" is based on the real-life events surrounding the 1992 Indian stock market scam, orchestrated by Harshad Mehta, a stockbroker. The series is a dramatized retelling of these events and provides a comprehensive look at how the scam unfolded:

In year 1992 Harsad Mehta made a scam approximately 5000 crore with the help of fake bank receipts and stamp paper that cause Indian stock market crash.

1. Rise of Harshad Mehta: The series begins with Harshad Mehta (played by Pratik Gandhi) as a small-time stockbroker who dreams of making it big in the stock market. He is a charismatic and ambitious individual who uses unorthodox methods to climb the financial ladder.

2. Exploiting Loopholes: Harshad Mehta discovers a regulatory loophole in the Indian banking system involving Ready Forward (RF) transactions. He realizes that he can borrow money from banks against government securities and manipulate stock prices to his advantage.

3. Stock Market Manipulation: Mehta starts using the RF transactions to manipulate stock prices. He pumps up the prices of certain stocks by buying them in massive quantities, creating a false sense of demand, and then offloads his holdings at a profit.

4. Collusion with Bank Officials: Mehta forms alliances with key bank officials, including those at the State Bank of India, who help him secure loans without proper collateral. This allows him to amass vast amounts of funds to continue his stock market manipulation.

5. Creation of Fake Bank Receipts: To secure even more funds, Mehta and his associates create fake Bank Receipts (BRs) that falsely represent the amount of money they have in their bank accounts. These fake BRs are used as collateral to obtain more loans.

6. Meteoric Rise: Harshad Mehta's wealth and influence grow exponentially. He becomes a legendary figure in the stock market, earning the nickname "The Big Bull." He flaunts his wealth and indulges in a lavish lifestyle.

7. Investigation: As Mehta's activities come under scrutiny, journalist Sucheta Dalal (played by Shreya Dhanwanthary) starts digging into the irregularities in the stock market. Her investigations lead to revelations about Mehta's financial manipulations.

8. Market Crash: Eventually, Mehta's fraudulent activities catch up with him, and the stock market experiences a massive crash. This crisis exposes the weaknesses in the Indian financial system and leads to a broader investigation into the scam.

9. Legal Battle: Harshad Mehta faces legal action and is arrested. The legal proceedings against him become a prominent part of the story, and he battles to defend himself in court.

10. Impact: The scam has far-reaching consequences, affecting not only the financial markets but also the lives of those involved. It exposes the flaws in the regulatory system and leads to reforms in the Indian financial sector.

The series "Scam 1992" provides a gripping and detailed account of how Harshad Mehta's stock market manipulations unfolded, the investigative efforts to uncover the scam, and the legal repercussions that followed. It also explores the human drama and the characters involved in the scandal, making it a compelling portrayal of a significant event in Indian financial history.

Main Factor of scam 1992 :-

The main factor behind the "Scam 1992" or the 1992 Indian stock market scam was the manipulation of the Indian financial system and stock market by Harshad Mehta, a stockbroker. Several key factors contributed to the scam:

1. Ready Forward (RF) Transactions: Harshad Mehta exploited a loophole in the banking system known as the Ready Forward (RF) transactions. In RF transactions, banks provided short-term loans against government securities. Mehta used these transactions to manipulate stock prices by using the funds to drive up the prices of specific stocks, creating a false sense of demand.

2. Circular Trading: Mehta engaged in circular trading, where he and his associates would trade stocks among themselves to artificially inflate their prices. This gave the illusion of high trading activity and attracted other investors to buy those stocks.

3. Fake Bank Receipts (BRs): To secure more funds from banks for his speculative activities, Mehta used fake Bank Receipts (BRs) that falsely represented the amount of money he had in his bank accounts. These fake BRs were used as collateral to obtain large loans.

4. Collusion with Bank Officials: Mehta colluded with bank officials, including employees of the State Bank of India, to create fake BRs and secure loans without proper collateral. This level of insider involvement was a crucial element of the scam.

5. Stock Price Manipulation: Mehta's manipulation techniques extended to the stock market, where he pumped up the prices of certain stocks by engaging in "pump and dump" schemes. He would artificially inflate the prices of certain stocks, attract investors, and then sell off his holdings at a profit, causing the stock prices to crash.

6. Regulatory Gaps: The regulatory framework and oversight in the Indian financial system at the time had significant gaps, making it easier for Mehta to carry out his fraudulent activities without detection.

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8. Lack of Investor Awareness: Many investors were not fully aware of the complexities of the stock market or the risks associated with Mehta's schemes. They were attracted to the high returns promised by Mehta's strategies.

9. Speculative Frenzy: During the early 1990s, there was a speculative frenzy in the Indian stock market, fueled by economic liberalization and the opening up of the Indian economy. This created an environment where unscrupulous operators like Harshad Mehta could thrive.

The combination of these factors allowed Harshad Mehta to carry out one of the most significant financial scams in Indian history, which eventually led to a stock market crash and a crisis in the Indian banking system. The "Scam 1992" web series dramatizes these events and highlights the various factors that contributed to the scam.