The buzz around Harshad Mehta and his mammoth exercise in investment fraud is at a fever pitch right now, thanks to Scam 1992. People want as much information as they can get about this rags-to-riches story that saw startling highs and destructive lows. But there have been quite a few people who have taken advantage of the financial foundation of India over the years. Here are some other famous Indian financial scams.
1. The Ketan Parekh Scam
Parekh, a chartered accountant, was actually a protege of Harshad Mehta himself. Also known as the Bombay Bull, Ketan used to obtain funds from banks, and artificially inflate stock prices in the Bombay, Kolkata, and Allahabad Stock Exchange. He even had aptly titled stocks called the K-10 stocks. However, when there was a Sensex crash in 2001, he was investigated and found guilty of rigging, leading to him being barred from the Indian stock exchange. He was charged with defrauding BoI of Rs 137 crore, and defrauding MMBC of Rs 1030 crores.
2. The Ramalinga Raju Satyam Scam
In 2009, Satyam Computer Services in 2009 chairman Byrraju Ramalinga Raju confessed to falsifying the company’s accounts. He told SEBI that this was done between 2003 and 2008, and that an amount of at least Rs 5000 crores was involved. The company misrepresented its accounts to its board, stock exchanges, regulators, investors and all other stakeholders. This was done in connivance with auditors and chartered accountants. Raju was finally sentenced to jail for 7 years and fined Rs 5 crore.
3. The C R Bhansali Scam
In 2013, the CBI arrested Chain Roop Bhansali, chairman of CRB Caps for masterminding a Rs 1200 crore scam that involved raising public money through FDs, MFs and debentures via non-existent firms and investing them in stocks for personal gains. However, the case had actually been going on since 1997, but Bhansali had escaped to Hong Kong for many years. He and his family finally returned many years later, and were consequently charged for the crime.
4. The Jignesh Shah NSEL Scam
In 2013, a scam came to light that was headed by Industrialist Jignesh Shah. He had started National Spot Exchange Limited (NSEL), a company that provided an electronic platform to farmers and traders for spot trading in farm products and bullion. However, commodities that were traded on NSEL were not actually found in the warehouses. Over 13,000 investors lost money due to alleged malpractices by the directors and promoters of the NSEL, and the scam amounted to a whopping Rs 5600 crore.
5. The Saradha Scam
This was a major financial scam that came to light after the collapse of a ponzi scheme run by the chit-fund company called Saradha Group, which was a consortium of over 200 private companies. The scheme is alleged to have cheated over a million (mostly poor) investors in West Bengal, Assam, Jharkhand, and Odisha. Sudipta Sen, the chairman of the company, tried to flee, but was arrested in 2013. The amount they bagged is estimated to be between Rs 1200 – 4000 crore.
What’s disappointing to see is the pattern of the poor losing money, and these fraudsters who duped them getting away with extremely short jail sentences.