Harshad Mehta – India’s Infamous Stock Market Scandal

The Harshad Mehta Scam: India’s Infamous Stock Market Scandal

Harshad Mehta case, often referred to as the ‘Big Bull’ scandal, is one of the most notorious financial scams in the history of India.

It was a tale of manipulation, greed, and regulatory lapses that shook the nation’s stock markets.


In the late 1980s and early 1990s, Harshad Mehta, a stockbroker, and financial wizard, rose to fame in India’s financial circles.

He was known for his extraordinary ability to manipulate the stock market and make substantial profits.

Harshad Mehta

The Scandal Unveiled:

In 1992, the scam came to light when it was discovered that Mehta had been involved in massive stock price manipulation and had used a banking loophole to fund his speculative trades.

He had borrowed heavily from banks and bought large quantities of shares, artificially inflating their prices.

The Impact:

The Harshad Mehta scam had a catastrophic impact on the Indian stock markets. The benchmark index, the BSE Sensex, crashed by over 50% within a few weeks, wiping out billions of dollars in market capitalization.

Investigation and Legal Consequences:

Harshad Mehta was arrested in 1992, and investigations by various agencies began. The scam involved several high-profile banks and individuals.

In 2001, Mehta was convicted of securities fraud. He passed away in 2001 while serving his sentence.

Recovery and Reforms:

The scam exposed critical gaps in India’s financial regulatory system and also several reforms were introduced, including changes to stock market regulations and banking practices.

The Securities and Exchange Board of India (SEBI) was given more power to oversee and regulate the stock markets.

Lessons Learned:

The Harshad Mehta scam was a stark reminder of the importance of strong regulatory oversight, transparency, and the need to prevent market manipulation.

It also highlighted the vulnerabilities of the banking system that were exploited by Mehta.


The Harshad Mehta scandal remains a landmark event in the history of India’s financial markets.

It had far-reaching consequences on both the stock market and regulatory mechanisms. While it exposed systemic weaknesses also served as a catalyst for financial market reforms, making them more resilient and secure.

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