The Harshad Mehta scam was a big problem in India a long time ago. Harshad Mehta was a person who worked with stocks in Mumbai, India. He became famous because he was good at buying and selling stocks, but he also did some bad things that hurt a lot of people.
Here's what happened:
Harshad Mehta found a way to cheat the stock market. He would buy a lot of stocks to make their prices go up. Then, when the prices were high, he would sell them to make a lot of money. But he didn't just use his own money. He found a way to get money from banks .
He did this by using something called "ready forward" deals. These deals were meant for banks to lend money to each other for a short time. But Harshad Mehta used fake documents to get the banks to give him money. Then, he used that money to buy stocks and make their prices go up.
He also worked with some people inside the banks. They helped him get the money he needed without following the rules. This made it easier for him to cheat.
Harshad Mehta's plan worked for a while. He made a lot of money, and people thought he was very smart. But then, some journalists found out what he was doing and wrote about it in the newspapers. This made everyone worried about the stock market, and prices started to go down.
When people found out that Harshad Mehta had cheated them, they were angry. Many people lost their savings because of what he did. The government had to step in and investigate the scam.
Harshad Mehta was arrested and put on trial. He faced many charges for cheating and fraud. But the trial took a long time, and before it could finish, Harshad Mehta died in 2001. So, he never got punished for what he did.
After the scam was discovered, the government made some changes to prevent it from happening again. They made new rules to regulate the stock market better. They also made stricter laws to punish people who cheat in the stock market.
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