During the 80s and 90s, Harshad Mehta was a big name on the Bombay Stock Exchange. Harshad Mehta registered himself as a member of the BSE (Bombay Stock Exchange); however, he set up a stock brokerage firm of his own in the name of “Grow More Research and Asset Management.” This article will talk about Harshad Mehta death.
The Harshad Mehta death story was big and exciting news in those days as it had shaken the entire stock market and the Indian economy. He was named the big bull for starting the Bull Run in the so-called share market of the 90s with his immense risk-taking propensity. He had owned a few real estate properties in the 90s, comprised of a luxurious house of 9 stories, as the stock market was his primary obsession.
House of Harshad Mehta
Harshad Mehta purchased 9 houses in Madhuli Housing Cooperative Society at Worli in Mumbai to accommodate his entire family. He combined all these 9 houses into a single large house to accommodate every member of his joint family. It is said that Harshad Mehta’s house had a mini movie theatre, a billiard room, a swimming pool, and even a miniature golf course.
During the 1990s, the house owned by Harshad Mehta and their family was spectacularly inspiring for wealthy businessmen of similar categories in those days. His house had all the luxurious and advanced amenities in those days, which were awe stuck for the other big stock brokers. The area of his penthouse comprised 15000 square feet at the sea-facing location at Worli, in Mumbai.
The National Scam
The Harshad Mehta Scam was concerned with trading shares and securities on the Bombay Stock Exchange. The scam discovered all the loopholes in Indian Banking and Financial Law. Due to this 1992 securities scam in the Bombay Stock Exchange, the entire stock market crashed. This man had an extraordinary rise and extraordinary fall in the share market.
He was the key conspirator in the securities scam of 1992. Harshad Mehta was the humble man from Rajkot, Gujarat, who had led the abrupt rise of the bull market, i.e., the stock market in the 1990s. During this time, the Bombay Stock Exchange Sensex jumped from 1,300 in June 1991 to 4,500 in April 1992. Even though he is infamous for the stock exchange scam, he had a mass following: awe trucking.
At the time of the revelation of the scam of Harshad Mehta, 14 days was the time for the settlement cycle for delivering the sold stocks. But currently, the settlement cycle is two days. During those days, a customer did not need a minimum restricted balance to buy stocks. Even a broker did not need a Demat account to sell the stocks. Thus all these loopholes within the system behaved as a booster for Harshad Mehta.
Other Scam Details
Harshad Mehta did financial laundering and manipulated stocks by procuring the funds illegally from the different esteemed nationalized banks, including the National Housing Bank, State Bank of India, and UCO Bank, using fake bank receipts. According to the banking regulations of those days, they did not allow the share brokers to take loans from the bank for trading purposes.
However, Harshad Mehta found a way of getting out of this by contacting several banks and buying and selling government securities using a timeframe. During that timeframe, he would use the funds he collected to buy the shares of companies on fuel prices.
It is said that, during those days, even a simple associate of Harshad Mehta would ask him the share price of company stock, which would be enough reason to raise the price of that company stock. By getting impressed with the success of his scheme, Harshad Mehta boosted up to enhance his fraud by asking the banks to help him print the fake bank receipts.
The stock market completely crashed after the exposure of Harshad Mehta’s scam. From where he borrowed money, the banks started demanding their money, and even the shareholders began to sell their shares immediately. This crash situation of the stock market washed away worth trillions of the investors’ wealth, eventually in less than two months.
Consequently, in November 1992, CBI arrested Harshad Mehta and his two brothers, Ashwin and Sudhir Mehta, who was also involved in the scam. Harshad Mehta was charged with 72 criminal offenses by the CBI. More than 600 criminal action cases were lodged against him by different banks and financial institutions.
His Death Story
Harshad Mehta died on 31st December 2001 after the accusation of the biggest security scam. He died unceremoniously while serving a jail prison at the Civil Hospital Thane following chest pain. As per the medical reports, he died of cardiac arrest.
Though his wife, Jyoti Mehta, claimed that he died due to the medical negligence of the jail authorities as they denied and delayed his treatment for nearly four hours. Harshad Mehta death happened when he was 47 years of age. When he died, his Net Worth was $475 million.
Harshad Mehta was a self-made millionaire who had a straightforward beginning at the initial point of his career. He had risen extraordinarily in the stock market at a rapid pace and, more extraordinarily, had fallen. When he was at the peak of his stockbroking game, his net worth stood at Rs 3,542 crore. However, in terms of dollars, it was over USD 480 million.
Harshad Mehta was accused of financial fraud of $ 1.4 billion. This fraud occurred when India did not have a law to penalize insider trading. Despite the enormous financial scam, the investments in the property of Harshad Mehta were quite suitable for a man of his stature then. He maintained cars like Toyota Corolla, Lexus Starlet, Toyota Sera, etc.
Harshad Mehta’s “GrowMore Research and Assets Management” office was elongated across the entire floor in the Makers Chamber V at Nariman Point. This office space, at that time, was counted as one of the most highly-priced commercial spaces throughout the globe. Even he had quite an impressive residential stay. However, he did not have any property abroad. His prime obsession was an investment in the share market.
As per his possession, Harshad Mehta had a fancy fleet of over 29 luxury imported cars. Some of the cars were even worth more than 40 Lakhs. He would often lend his swanky and luxurious residential space for photography to the media.
The Successor of Harshad Mehta
Harshad Mehta is succeeded by his only child Aatur Harshad Mehta. Professionally Aatur Mehta is an investor, and like his father, he is also an entrepreneur. During Harshad Mehta’s death, Aatur Mehta was only 22 years of age. He prefers to maintain a low profile and wants to keep himself away from the media’s attention.
In 2018, news broke out regarding Aatur Harshad Mehta when they bought a crucial stake in a BSE-listed textile company, Fair Deal Filaments. Through the transaction of an open market, the textile company agreed to sell 1.4 million shares of the company to Aatur Mehta and one of his partners, Sanalkumar Kizhepata Menon.
The Revelation of the Scam
The Harshad Mehta scam was revealed by the journalist Sucheta Dalal, who was working for the Times of India. Observing the lavish lifestyle and the luxurious living of the Big Bull-Harshad Mehta, she was intrigued to investigate further the big bull’s earning sources valued at Rs. 1000 crore in such a short period.
However, the unrevealed truth behind the practice of manipulating the shares by Harshad Mehta was revealed on 23rd April 1992 for the first time to the public through the article written by Sucheta Dalal. The article was published in the esteemed daily Times of India. The article explained how Harshad carried out the financial fraud of Rs. 500 crores from the State Bank of India’s treasury.
Harshad Mehta was born in Gujarati and belonged to a Jain family. He had a very simple childhood. He spent his early childhood at Kandivali in Mumbai. There, his father had a small textile business. Later, the entire Mehta family shifted to Raipur in Chhattisgarh, where Harshad completed his schooling. He returned to Mumbai city in 1973 to pursue graduation.
After graduation, Harshad did different temporary jobs like sorting diamonds, selling hosiery, and becoming a cement contractor. He also worked as a clerk in an insurance company. Apart from this, he tried his luck in several sales jobs over the next eight years of his career.
Eventually, he gained interest in the stock market. That’s when he started working as an insurance agent in the Bombay office of New India Assurance Company Ltd.. However, in 1981 he initiated to work as a jobber. This was for an established stock broker named Prasann Pranjivandas in 1981 by quit his present job at NIACL. He considered Pranjivandas his ‘guru’ in the share market business.
Harshad Mehta became a member of the BSE (Bombay Stock Exchange) in 1984. He set up a stock brokerage firm of his own in the name of “GrowMore Research and Asset Management.” Further, he followed a very simple style of executing a business and wanted to lead a deluxe life, so he did. He was married, and his wife’s name was Jyoti Mehta.
The name of his only child is Atur Mehta, who is now an investor and an entrepreneur. His father’s name was Shantilal Mehta, who had a small business, and his mother’s name was Rasilaben Mehta, a homemaker. Harshad Mehta had three brothers, Hitesh Mehta, Sudhir Mehta, and Ashwin Mehta, a well-known lawyer.
Mr. Mehta was an ill-famed personality and a big name once in the share market business. He taught the youngsters of his time to dream of success and lead a luxurious life. Although Harshad Mehta’s death was unceremonial, he had mass followers for getting such an early success within a short period. His life story is quite dynamic and exciting. Numerous twists and turns introduced the bull run in the then-share market.