>> Saturday, January 10, 2009
Every eight years there is a scam in Indian Stock Markets it is true and is proved. In the year 1992 Harshad Mehta , in the year 2000 Ketan Parekh Scam and now we have Raju’s scam (Satyam).
Scam of 1992 - Harshad Mehta was an Indian stockbroker and is alleged to have engineered the rise in the BSE stock exchange in the year 1992. Exploiting several loopholes in the banking system, Harshad and his associates siphoned off funds from inter-bank transactions and bought shares heavily at a premium across many segments, triggering a rise in the Sensex. When the scheme was exposed, the banks started demanding the money back, causing the collapse. He was later charged with 72 criminal offenses and more than 600 civil action suits were filed against him. He died in 2002 with many litigations still pending against him.
Scam of 2000 - Ketan Parekh was a Mumbai-based stock broker. He hails from a well-to-do Gujarati family involved in share trading, and Ketan was involved in the shares scam of 2000-2001 on the Indian Stock Market.Companies, when raising money from the stock market, rope in brokers to back them in raising the share price. Ketan formed a network of brokers from smaller exchanges like the Allahabad Stock Exchange and the Calcutta Stock Exchange, and used benami, or share purchases, in the name of poor people living in the shanty towns of Mumbai. Ketan rose to fame at the same time as the worldwide dot-com boom (1999-2000) and he relied primarily on the shares of ten companies for his dealings (now known infamously as the K-10 scrips).
Ketan Parekh was arrested on December 2, 2002 in Kolkata.
Scam of 08 – 09 - Satyam's Scam (Its too fresh to forget) – Raju Ramalinga affirmed in a letter to the board that neither he nor the managing director had benefited financially from the inflated revenues. He claimed that none of the board members had any knowledge of the situation in which the company was placed. He noted t
hat Satyam's balance sheet as of the September 30, 2008, carried inflated figures for cash and bank balances of INR 5,040 crore (as against INR 5,361 crore reflected in the books). It carried an accrued interest of INR 376
crore which was non-existent. An understated liability of INR 1,230 crore on account of funds was arranged by himself. An overstated debtors' position of INR 490 crore (as against INR 2,651 crore in the books).
Should we be prepared for the next scam after eight years?
I just hope we don’t have any more scams.
SEBI will now be more cautious.
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