SOME KNOWLEDGE FACTS ABOUT HARSHAD METHA

                                         SOMEKNOWLEDGE    =                                                             REALNAME = HARSHAD SHANTILAL METHA . HARSH METHA WAS A BROKER AND A SHARE MARKET EXPERT .HARSH Mehta engaged in a massive stock manipulation scheme financed by worthless bank receipts. METHA WAS CONVICTED BY THE BOMBAY STOCK EXCHANGE [BSE]                                                                                                                                                                                                                                                                                                       EARLY LIFE                                                                                  HARSHAD METHA WAS BORN ON 29 JULY 1954 at PANELI MOTI ,RAJKOT DISTRICT GUJARAT AT GUJARATI JAIN FAMILY    AND DIED ON  31 December 2001                                                                                             EARLY CAREER                               HARSHAD METHA TRIED VARIOUS JOBS , often related to sales, including selling hosiery, cement, and sorting diamonds. HARSHAD Mehta started his career as a sales person in the Bombay office of New INDIA ASSURANCE COMPANY LIMITED DURING THIS TIME HE GET INTEREST IN STOCK MARKET                                                                                                                  ABOUT 1992 SCAM                                        On 23 April 1992, journalist SUCHETA  DALAL  exposed Mehta's illegal methods in a column in THE TIMES OF INDIA . Mehta was dipping illegally into the banking system to finance his buying.

A typical ready forward deal involved two banks brought together by a BROKER in lieu of a COMMISSION The broker handles neither the cash nor the securities, though that wasn't the case in the lead-up to the scam. In this settlement process, deliveries of securities and payments were made through the broker. That is, the seller handed over the securities to the broker, who passed them to the buyer, while the buyer gave the cheque to the broker, who then made the payment to the seller. In this settlement process, the buyer and the seller might not even know whom they had traded with, either being known only to the broker. This the brokers could manage primarily because by now they had become MARKET MAKERS  and had started trading on their account. To keep up a semblance of legality, they pretended to be undertaking the transactions on behalf of a bank.

Having figured out his scheme, Mehta needed banks which issued fake BRs (Not backed by any government securities). "Two small and little known banks – the Bank of Karad (BOK) and the Metropolitan Co-operative Bank (MCB) – came in handy for this purpose. These banks were willing to issue BRs as and when required, for a fee," the authors point out. Once these fake BRs were issued, they were passed on to other banks and the banks in turn gave money to Mehta, assuming that they were lending against government securities when this was not really the case. This money was used to drive up the prices of stocks in the stock market. When time came to return the money, the shares were sold for a profit and the BR was retired. The money due to the bank was returned.

This went on as long as the stock prices kept going up, and no one had a clue about Mehta's operations. Once the scam was exposed, though, a lot of banks were left holding BRs which did not have any value – the banking system had been swindled of a whopping ₹40 billion (US$560 million). He knew that he would be accused if people came to know about his involvement in issuing cheques to Mehta. Subsequently, it transpired that CITIBANK, brokers like Pallav Sheth and Ajay Kayan, industrialists like ADITYA BIRLA, Hemendra Kothari, a number of politicians, and the RBI Governor S.VENKIYARAMANAN all had played a role in allowing or facilitating Mehta's rigging of the share market                                                                                                                                                                                                                            

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