Harshad Mehta

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The Independent Online

Harshad Mehta, stockbroker: born Raipur, India 1954; married; died Bombay, India 31 December 2001.

Known as the "Big Bull" of the Indian stock market, Harshad Mehta was charged in 1992 on 27 counts for engineering the biggest stock-market scam to rock the country since independence, but the flamboyant Mehta had once been the investors' darling.

After market reforms transformed India's protectionist economy in 1991, Mehta emerged as the country's leading stockbroker who, within months, had sent the Bombay Sensex share index soaring. He was hailed as a financial magician and invited to make a presentation to the federal government on capital market reforms. But Mehta's financial wizardry and his riches derived from a manipulation of banking procedures that allowed him to borrow money to bolster the markets artificially.

When he was arrested in 1992, the overheated market crashed overnight, beggaring thousands, rocking parliament and paralysing India's financial markets. The effects of the crash are still resonating today. It led to the establishment of an investigative parliamentary committee and the eventual implementation of various trading reforms.

Weeks after his release on bail, Mehta claimed that he had bribed the prime minister, Narasimha Rao, for financial favours. Rao denied the allegations, and they were later disproved. But Mehta had won a tactical victory; he managed to avoid further attention from government agencies investigating money laundering and other economic offences.

Mehta's was a classic rags-to-riches story. Born into a poor family in Raipur in Central India in 1955, he was schooled locally and moved to Bombay in the 1970s, becoming a dispatch clerk in an insurance firm. Promoted to second division clerk, he began punting on the stock market and within a short time enrolled himself as a sub-broker and set about learning market dynamics.

He became a fully fledged stockbroker and by the late 1980s had emerged as the "Sultan of Dalal Street", Bombay's financial and commercial hub. When economic reforms were introduced in March 1991, Mehta drove India's market to dizzying heights. In the 1992 boom period Mehta was single-handedly responsible for driving the Bombay Sensex to 4400 points from less than 900 points a year earlier. But his flashiness tipped off the federal Central Bureau of Investigation.

In April 1992, federal investigators arrested Mehta and set about trying to convict him in India's notoriously inefficient and corrupt legal system. In seven years Mehta was convicted on just one count but his appeal against the verdict is still pending in the Supreme Court.

In April last year he was debarred for life from dealing in securities and seven months later was rearrested for dealing in "missing" securities from the 1992 scam. Mehta was refused bail and ended his "bull run" in jail.

Kuldip Singh