Here are the five biggest scams in the history of India. This makes us think: how rich is India?
When we were kids, we were told by our parents that India was a Golden Bird before the British invaded the subcontinent. They are alleged to have taken control of the most glorious country in the world around 270 years ago. But how much has the financial situation of the country improved since then?
Not much. India has always been prey to rampant corruption and weak government norms. In the end, who pays the money? The precious taxpayers. Today, through this article, I am going to highlight the five biggest scams in India that shook the government and the country.
The Harshad Mehta Scam
The famous stockbroker of the late 1980s and early 1990, Harshad Mehta became the buzz in 2020 after the release of the web-series Scam 1992: The Harshad Mehta Story. After figuring out a loophole in the governmental norms, he got involved in multiple scams like the bank receipts and stamp paper scam and the Ready Forward Deal scam.
Harshad Mehta, the Big Bull, was quite a personality. He managed to take a huge amount of loans from various banks and put them up in the stock market. Then, through fictitious practice, he would raise the stock price of the specific company he was investing in. This process was running well until the stocks crashed and the loss was huge — Rs 10,000 crore, which was more than the total health budget and education budget of India combined. He was arrested in 1992 and kept in custody for five years for the fraud.
It is one of the most popular and biggest scams in the history of India.
Nirav Modi
How about a celeb diamantaire who has handled the famous IPL for the country? Nirav Modi, with his uncle Mehul Choksi, scammed the Punjab National Bank (PNB) and disappeared. The non-repayment cases in banks are not new, but the jeweller businessmen became an exception as the amount of loan they had managed to take from the bank was of whooping Rs. 13,500 crore.
The bank officials accepted that the loan was issued by some of the senior management officials by violating the rule of arranging a legal guarantee document in case of a loan as big as this. Nirav Modi used to receive the amount in his overseas bank branches through the SWIFT financial communication system. This is how the taxpayers’ money was lost in the end. Even though the fugitive was arrested in London in 2019, the money is still far from retracted.
Vijay Mallya
The former owner of Kingfisher, Vijay Mallya was also a celebrity and a former member of Parliament, who took a loan from multiple (17) banks and disappeared. The combined loan amount was Rs 9,000 crore. He was later accused of fraud and money laundering.
Vijay Mallya was a businessman involved in a profitable brewery business. However, he then entered the airline business to expand his company. Soon after the initial days, the airline went into breakage and he had to borrow money to keep it running. Loans were taken through various banks but led to nowhere. Finally, he collapsed to a limit and he had to leave the country instead of repaying the loans. He was also arrested in London recently but hasn’t been sent to India for further enquiry.
The Kingfisher scam is also one of the most famous and biggest scams in the history of India.
Ketan Parekh
Ketan Parekh was the second person, after Harshad Mehta, to shake the Bombay Stock Exchange (BSE). He was a protégé of Harshad Mehta and knew the market in and out. He had invested in stocks that got him a 200% annual return.
He started playing the role of the operator of the market and as the market came in control, he got involved in insider trading. And again, like his teacher, he took unguaranteed loans from banks and invested them until the stock market crashed and got Ketan into trouble. He was found guilty of investing a loss of Rs 2,000 crore and arrested later.
Satyam Scam
This was a scam produced by the former promoters and managers of the Satyam scam, Security and Exchange Board of India. They were able to carry out fraud on a huge scale. Ramalinga Raju, his brothers and seven others were accused of the fraud.
He and his allies were arrested for the biggest scam in the history of India, each jailed for seven years. The fraud was carried out by overstating the amount in the balance sheet of the various transactions in the Exchange books. The total amount incurred was Rs 14,162 crore. The scam broke out as Ramalinga Raju wrote confession letters to SEBI and the stock exchange.
Note: The article was originally published here.