The biggest arrest for any developing country is the loopholes around which its economy gets woven. On the global sheet, we notice that India has also suffered major setbacks with many of them identified as corporate scams.
Often, when you turn on a news channel or read the paper, a prominent space is occupied in the coverage of scams. Like talk-times for your mobile, they come about in every scale, every state, every industry, and under every administration. When spotted, scam are taken under rapid deeds by the Indain Court, but with time the judgment dawdles and the nation soon overlooks it with another breaking scam headlines.
From the never ending list of such scams, here’s telling about 5 that have tagged as tagged as mammoth corporate scams.
Most commonly termed as Harshad Mehta cheat, the scam came under speculations on 23 April, 1990. Sucheta Dalal, a journalist with Times of India revealed the illicit manner of financing that Mr. Mehta was following.
As India was gradually recognizing the new stock market, Mr. Mehta, a graduate in commerce and a stockbroker, had already detected possible targets in a very short period of time. He collaborated with several small banks in India and used them to issue fake bank receipt that was confirmed the sales of securities. In that conduct, fake bank receipts were passed and strategically brought a flood in the stock market and was repeated till the prices kept on hitting the higher note.
However, when the scam was exposed most banks were left with nothing but fake receipts and the scandal value was approximately $840 million and for this illegal action Mr. Mehta was tried for 9 years but died in 2001.
Although, the scam was against a Singapore based company that had networks entrenched in different corners of the world, India was the major victim to this fraud. India barely had more 24 lakh depositors who invested thousands of crores in an online business survey firm.
The business group asked people to invest small shares in the industry and receive quadruple income in a year. A case against the fraud dealings of Speak Asia group was filed in august 2011 on a 5000 plus charge sheet. The scam is reported to hold a worth of more than 2000 crores.
Ram Sumiran Pal, one of three masterminds behind the scam was arrested after two years from filing the case. However, his two brothers are still not traced and the scam remains an unsolved mystery.
This scam was a Ponzi scheme run by Saradha Group that was mistakenly referred to as chit fund. The scheme drew attention of the low-income rural population of eastern states of India, especially West Bengal and other neighboring territories.
In nearly three years, the company built a wide agent pyramid and recorded deposits of around 10 billion. However, the doings came under the regulations of SEBI and the company was first challenged in 2009 and again in 2010. The corrupt investment method was finally detected in 2012 and lead to the collapse of the company in 2013.
On investigating, it was evident that the company was receiving financial support from several political leaders and parties. Prime among them were Debjani Mukherjee and Sudipto Sen, who were arrested on 23, April 2013 in Kashmir and were charged for an estimated loss of US$4–6 billion.
Around early 2000’s, a company called Home Trade Ltd. emerged and quickly earned a prominent name in the market with advertisements featuring some popular faces like Sachin Tendulkar, Shah Rukh Khan and Hrithik Roshan.
The company claimed over simplified dealings in gilts, where several banks in Maharashtra lured people with higher rate of interest. But the idea sounded a bit suspicious to the RBI and soon came under infestation radar.
Sanjay Agarwal and Sunil Kedarwere the two main suspects and were taken under custody. The scam involved as much as 600 crores INR.
In all probabilities, the scam can be termed as biggest corporate con in Indian history. In 2009, Ramalinga Raju, the chairman of Satyam confessed that company’s accounts had been falsified.However, later Raju admitted his involvement in the scam and how he manipulated several company accounts.
For a scam above 72 thousand crores, Mr. Raju was declared guilty with two more accused and had to spend 32 months behind bars, before he was granted a bail by Supreme Court in 2011.
The scam took Satyam Group by a storm and their shares fell to 11.50 rupees, the lowest in more than a decade. However, Mahindra groups purchased a 46% stake in Satyam and merged it as Mahindra Satyam in 2012.