Scam 1992: The Harshad Mehta Story has caught the attention of people across the country. It’s a web-series based on the book, The Scam: Who Came, Who Lost, Who Got Away, written by journalists Sucheta Dalal and Debashis Basu, and is currently airing on Sony LIV.  The show is about notorious stockbroker, Harshad Shantilal Mehta, his rise to fame as the “Amitabh Bachchan of the Stock Market” in the 1980’s, and his eventual fall in the 1990’s. This isn’t a show only for those in finance. It’s a show for everyone. And I’ll tell you why.

The inter-connectedness of the Stock Market

The world of finance isn’t all numbers. Human psyche and behaviour form an integral part of it. Like money, the stock market, too, was created by us, humans. In Bill Gates’ favourite book on business, Business Adventures, writer, John Brook says,

“The first stock exchange was, inadvertently, a laboratory in which new human reactions were revealed. By the same token, the New York Stock Exchange is also a sociological test tube, forever contributing to the human species’ self-understanding.”

A stock market is often considered an indicator of a country’s economic development. It also offers insights into consumption patterns, wealth of households, and the general mood of the people. And when a show tells the true story of the common man intertwined with the four pillars of a democratic government, namely, legislature, executive, judiciary and media, how can it not intrigue us all.

“Risk Hai Toh Ishq Hai”

Image Courtesy: Wikipedia and SonyLIV

The 10-part series that runs for around 7 hours, dives deep into the life of a young man with big dreams and great resolve. In a recent Behind the Scenes video, journalist and poet, Pritish Nandy, who plays himself in the show, says of Harshad,

“He’s one of the sharpest guys I’ve met. He always spoke very highly of India and the dream that he had was to put India on the world stock market map.”

Taking calculated risks was Harshad Mehta’s life mantra, and the rewards that followed only fueled his ambition.

The determination and drive with which one must live life is universal. But when greed is added to the mix, it can lead anyone down murky paths, and Harshad was no exception. Despite the effort that went into building his company, Growmore Research and Asset Management, from the ground up, Harshad Mehta’s love affair with money slowly spiralled out of control.

Determination, however, wasn’t a trait that only Harshad had. Journalists, Sucheta Dalal and Debashis Basu, were brimming with it, too. It was they who followed his story and threw light on his questionable ways of doing business. They took many-a-risk, too. And the reward? Umpteen financial reforms.

The Aftermath

All the grey areas, all the loopholes that Harshad Mehta used in his time, led to many structural reforms in the Indian banking and financial system. The Securities and Exchange Board of India Act was passed in the year 1992, and the then merely four year old regulatory body, SEBI, was given greater powers and functions to oversee the capital market and eliminate malpractices.

Here’s a list of a few pertinent changes that have taken place over the years.

Physical mode versus Electronic mode

Back then, every share was represented by a share certificate. The risks were higher with trades and transactions in paper mode. Today, the electronic mode ensures greater transparency thanks to the birth of the “Demat account”.

Settlement Cycle

In 1992, the time limit within which brokers had to either pay investors for shares sold, or deliver share certificates if bought, was 14 days. Today, this period is down to 2 days, and in the future, could be further reduced to 1 day.

Brokers and Brokerage

Thirty years ago, one needed a broker to trade and invest in the stock market. Which also meant a brokerage fee of 1-2%. And one had to rely on their own quoted prices. Today, one can invest directly, and no charges are levied.

These are just a handful of the many developments that took place after the scam. The banking sector underwent major reforms as well. The year 1999 saw the government set up the Investor Education and Protection Fund, an authority responsible for safeguarding the interest of investors.

Why do we investors need safeguarding, you ask? In the market crash of 1992, the index, (at nearly 40,000 today), then fell from 4500 to 2500 in a matter of days. Many investors relied heavily on Harshad Mehta’s advice. And when they discovered how much they’d lost, many died by suicide, unable to come to terms with what their trust in him had led to. It’s important to know that investing in the stock market comes with risks. And going by tips that your friend or neighbour might give you, rather than doing your own research, isn’t wise at all. The measures put in place in the 90’s were a result of the malpractices that caused chaos in the country.

But did we, the investors, need protecting from a lone, big, bad wolf? Or from the inefficiencies and money-mindedness of it all? Can we truly attribute all this to just one man’s desire to be “rich and famous”?

What if We Change the Question?

Growing up, I often heard this question, “Do you want to be rich or famous?” Instead, what if we asked ourselves, “What impact do you want to have in the world?”, “Are you working towards causes that matter to you?”

Harshad Mehta was passionate about many things. He was a keen observer, a learner, and he honed his skills continuously. His methods, though, were questionable, and were what eventually led to his downfall.

It’s been nearly 12 years since I first heard his name. A young student of the Chartered Accountancy course, I vividly remember one of my professors talking about the scam of 1992. I couldn’t fully grasp it then. Curiosity led me to ask my dad more about it, who’s been in this field since his 20’s. But it’s not easy to explain the series of events that unfolded during those years. Which is what makes Scam 1992 so brilliant.

Director, Hansal Mehta, and the entire cast, right from Pratik Gandhi to Shreya Dhanawanthary to Chirag Vohra, (I could name them all!), are excellent performers. They bring the story to life so effortlessly that you’re drawn into the saga and are hooked until the very end. And it’s not because I’m in finance. It’s because it’s a piercing story filled with layers that is made even more exceptional by the people portraying the characters. It’s no wonder then that the show touched a rating of 9.6 on IMDb, within three weeks, surpassing the likes of Game of Thrones and Chernobyl.

So, no matter what field you’re in, don’t waste another minute. Go watch the show and uncover the truth for yourself. And if it doesn’t leave you amazed, you can call this write-up a load of “Big Bull.”

Author Bio - Komal Shivdasani

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