Harshad Mehta's $1.4B securities scam — the Big Bull who crashed India's market

Harshad Mehta was an Indian stockbroker who rose from a small-time salesperson to become known as 'The Big Bull' of the Bombay Stock Exchange. He was a media celebrity in the late 1980s and early 1990s, living a flashy lifestyle and cultivating an image of market genius. At his peak, he was one of the most powerful figures in Indian finance, with his trades capable of moving the entire market.

The scam worked through two mechanisms. First, Mehta exploited the 'ready forward' system where banks issued Bank Receipts as collateral. He got small banks to issue fake BRs not backed by government securities, then passed them to other banks who gave him money. Second, he promised banks higher interest rates to transfer money to his accounts under the guise of buying securities. He used the money to buy shares — ACC, Sterlite, Videocon — driving prices up by 4,400%, then sold at a profit.

The scam was exposed on April 23, 1992, by journalist Sucheta Dalal in The Times of India. The market crashed, and the banking system was revealed to have been systematically exploited. Mehta faced 27 criminal charges and was convicted on 4 counts. SEBI banned him for life from stock market activities. He was sentenced to 5 years in prison and died on December 31, 2001, at age 47, of a heart attack in Thane prison, with many litigations still pending.