financial crime in india

7/29/2019 Financial Crime in India

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Submitted By:

AMIT KUMAR MANDAL

UNIV. ROLL NO.-20120051


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WHO IS THIS MAN????

He is known as BIG BULL

HARSHAD MEHTA

Biggest scam of Indian stock exchange

Its all about Being Big Bull


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BACKGROUND Gujarati Jain family

Father : Mr Shantilal Mehta ,

a small businessman

After coming to Mumbai Harshad

Mehta joined his 1st job as dispatchclerk in the New India AssuranceCompany. But his 1st love is alwaysStock market.

During his work at New india

insurance he has started investingin stock market with his brotherAshwin Mehta.

Managed to get BSE brokers card.


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Big Bull Rises

After investing ,Harshad Mehta found some wrong patteron trades in stock exchange. He found that companies are not risingand falling as per their fundamentals, and he started manipulatingone stock named ACC.

It was rising , rising and rising only. But Harshad Mehta had reasonfor all the questions for its rising. Its Replacement Price Theory. He

was successful in explaining this theory to Indian public.

But the fact had another side too. Mr Mehta started buying this ACCat mid 1990 and then he made it public. It was HarshadMehtas trademarked style.

He used to study fundamentals, he used to buy in big quantity andthen he used to make is public. And demand of that stock used torise like anything after recommendation of this Big Bull !!


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Downfall of Big Bulls life In 1992, 1st article came out against this dream merchant and the story

was about 600+ Crores rupees scam !!

Mr. Harshad Mehta used Ready Forward Deal for this scam. He used to

take some short term loan from banks and used this money in stock

exchange to rise the price ,Pure manipulation.

As per Indian law it was not allowed to give such RF loan to any individual

person by bank. So it was clear that more than one banks were involved in

this scam. With this money Mr. Harshad Mehta used to make waves in Indian

stock exchange. He was using these banks illegally to manipulate the stock

exchange mechanism


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TSUNAMI IN STOCK MARKET


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COALGATE SCAM

Political Scam

Allocation of Coaldeposits to PSEs or

Private Firms


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COALGATE

March 2012, the Comptroller and Auditor General of India (CAG)

issued Draft:

i. Allocating coal blocks in an inefficient manner.ii. Government had authority to allocate coal in competitive

bidding.

iii. PSEs and Private firms paid less.

iv. The CAG put the figure at Rs 185,591 Cr (US$33.59 billion) BJP lodged a complain resulting in CBI probe into whether

allocation of coal blocks in fact influenced by corruption.


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Influenced by Corruption?

The initial report suggested that coal blocks could be allotted

for efficiently, at no point did it suggest that corruption was

involved.

In response to a complaint by the BJP, the Central Vigilance

Commission (CVC) directed the CBI to investigate the matter.

The CBI named dozen of firms in a FIR.


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ALLEGATIONS

Against S Jagathrakshakan

i. Minister of State for Information and Broadcasting inthe UPA government.

ii. Part of a company named JR Power Gen Pvt Ltd which wasawarded a coal block in Orissa in 2007.

iii. The same company which formed a joint venture with a publicsector company, Puducherry Industrial Promotion Developmentand Investment Corporation (PIPDIC), on January 17, 2007 fivedays after, PIPDIC was allotted a coal block.

iv. JR Power had no expertise in thermal power, iron and steel, or

cement, the key sectors for consumption of coal.v. In 2010, JR Power sold 51% stake to KSK Energy Ventures, anestablished player with interests in the energy sector. In this way,the rights for the use of the coal block ultimately passed on toKSK.


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Similar allegations were made against

i. Subodh Kant Sahai : Tourism Minister in

the UPA government.

ii. Vijay Darda and Rajendra Darda : Vijay

Darda, a Congress MP and his brother

Rajendra Darda, the education minister

of Maharashtra.

iii. Premchand Gupta : Who is the UPA

partner Rashtriya Janata Dal's leader.


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IMPLICATIONS

The major coal and lignitebearing states like West Bengal,

Chhattisgarh, Jharkhand, Orissa

and Rajasthan that were ruled by

opposition parties, were strongly

opposed to a switch over to theprocess of competitive bidding as

they felt that it would increase

the cost of coal, adversely impact

value addition and developmentof industries in their areas and

would dilute their prerogative in

the selection of lessees.


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financial crime in india

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