Top 6 Financial scams in India

Financial Scams have not been uncommon in India. A scam is a means of getting money by deception or in an illicit way with a fake identity or documents. India has now and then seen many scams in the financial world which has shaken Dalal Street.

The Securities Exchange Board of India has been reviving rules and regulation in an aim to plug the loopholes in the securities market. Here are top 6 financial scams from the long list of scams in India till date.

 

Roop Bhansali scam (1995)

CRB was once a top-notch investment banking firm, started by C R Bhansali. Roop Bhansali, through mutual funds, fixed deposits and debentures collected money from investors. With the help of non-existent companies, he has raised money and transferred to his other shell companies or others who invested with him.

 

Harshad Mehta scam (1992)

Case Talking of scams, how can we forget Harshad Mehta. He was known to have fooled many investors by taking advantage of loopholes in the system. This was probably the most publicized scam and came to be known as the Harshad Mehta scam. Harshad and his associates initiated a securities scam by diverting funds of about Rs 5,000 crore from the banks to stockbrokers between April 1991 to May 1992. After the scam was exposed, the stock markets crashed and Mehta was arrested and banned from trading in the stock markets.

 

Ketan Parekh scam (2001)

Following the footsteps of Mehta, Ketan Parekh had bigger plans. He conned banks and exchanges like the Allahabad Stock Exchange and the Calcutta Stock Exchange and bought shares in fictitious names to manipulate the share prices in companies. Ketan was a chartered accountant who used to run a family business, named NH Securities.

 

Satyam Scam (2009)

India's one of the biggest corporate scandal affecting India-based company Satyam Computer Services in 2009 in which Satyam Company's chairman Ramalinga Raju confessed that he manipulated accounts to show increased sales, profits and margins from 2003 to 2008. CBI took over the investigation and filed three partial charge sheets over the course of the year. It later merged those three partial charge sheets into a single charge sheet. On April 9, 2015, B. Ramalinga Raju, along with 9 others were pronounced guilty in the Satyam Scam.

 

Subrata Roy scam(2014)

Subrata Roy case is also called Sahara India Pariwar investor fraud case. In this case, Subrata Roy, the chairman of the Sahara India failed to return Rs 24,000 crore plus interests to its investors as directed by the Supreme Court of India. Eventually, he was arrested by Uttar Pradesh police on a Supreme Court warrant. The Supreme court of India granted interim bail on condition that he should deposit Rs 10,000 crore with Securities and Exchange Board of India(SEBI).

Subrata was eventually taken into judicial custody and sent to Tihar jail, along with two other Sahara directors, for failing to deposit Rs 10,000 crore to SEBI as per Supreme court of India orders. He got released on parole in May 2016 to attend the last rites of his deceased mother then the parole got extended.

 

NSEL Scam(2012)

Money from investors was syphoned off as the most of the underlying commodities did not exist and the buying and the selling of commodities were being only conducted only on paper. Investors were attracted by offering fixed returns on paired contracts in commodities. And it was later found out the stocks were missing. The NSEL is a company promoted by Financial Technologies India Ltd and the NAFE. Jignesh Shah along with Shreekant Javalgekar was accused of the scam.