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5 Scams that shook the Indian Stock Market

Harshad Mehta Scam - 1992• Year: 1992• Amount: 4000 cr ₹• Harshad Mehta’s modus operandi was, receiving

money from banks, lent against securities mentioned in fake BRs issued by certain banks. He then pumped this money into the market to hike up share prices. Once the prices began to fall, the scam was exposed and by then banks were duped off 4000 cr and the ₹BSE Sensex crashed by 570 points.

Ketan Parekh Scam - 2000• Year: 2000• Amount: 800 cr ₹• Ketan parekh invested in 10 low stocks and inflated

their prices forcing others to invest too. His mechanisms were the Badla system and Simple Borrowing mechanism. When stocks were high they were pledged against banks as collateral. Eventually he couldn’t keep up causing the market to crash by over 700 points in 2000.

Satyam Scam - 2009• Year: 2009• Amount: 7000 cr₹• Ramalinga Raju, the former chairman of Satyam

Computer Services, falsified the accounts and urged investors to pump money into the company shares. In 2009 he confessed to an accounting fraud of over ₹7000 cr, following which the market crashed by 749 points.

Saradha Group Fraud - 2013• Year: 2013• Amount: 20000 cr₹• A consortium of over 200 private companies formed

the Saradha Group which was founded by Sudipta Sen. They ran the Ponzi scheme, a fraudulent activity, and duped investors of over 20000 cr. Following ₹this the SENSEX crashed by 430 points on 13th May 2013

Sahara Scam - 2014• Year: 2014• Amount: 24000 cr₹• Sahara India Pariwar issued Optionally Fully-Fully-

Convertible Debentures, by their two group companies. By 2014 he owed investors over 24000 ₹cr which he was unable to pay off. Following which, Sahara had to sell part of their assets to raise the money. However he still owes investors 10000 cr. ₹

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