Top 10 Stock Market Scams in India
Top 10 Stock Market Scams in India
The Indian stock market has been plagued by several scams and fraudulent activities over the years. These scams have not only resulted in financial losses to investors but also tarnished the reputation of the Indian capital markets. In this article, we will look at the top 10 stock market scams in India with the amount and year in which they occurred.
Harshad Mehta Scam (1992)
The Harshad Mehta scam is one of the most well-known scams in the Indian stock market. Harshad Mehta, a stockbroker, exploited loopholes in the banking system to manipulate the stock market. He used the funds from the banks to purchase shares in the stock market, driving up their prices. The scam was worth around Rs. 4,000 crore.
Ketan Parekh Scam (2001)
Ketan Parekh, a stockbroker, manipulated the stock prices of several companies through circular trading and insider trading. The scam was worth around Rs. 1,250 crore.
Satyam Scam (2009)
The Satyam scam is one of the biggest corporate frauds in India. The founder of Satyam Computer Services, Ramalinga Raju, inflated the company’s revenue and profits by forging bank statements, invoices, and other financial documents. The scam was worth around Rs. 7,800 crore.
Sahara Scam (2011)
The Sahara group raised money from investors through two companies – Sahara India Real Estate Corporation and Sahara Housing Investment Corporation. The group claimed that the money raised was for a special deposit scheme. However, the scheme was not authorized by the SEBI, and the group failed to repay the investors. The scam was worth around Rs. 24,000 crore.
NSEL Scam (2013)
The National Spot Exchange Limited (NSEL) operated a spot exchange for commodities trading. However, the exchange allowed trading in non-existent commodities and failed to settle the trades. The scam was worth around Rs. 5,600 crore.
Saradha Scam (2013)
The Saradha group collected money from investors through a Ponzi scheme, promising high returns. However, the group diverted the money to fund their other businesses and failed to repay the investors. The scam was worth around Rs. 4,000 crore.
Vijay Mallya Scam (2016)
Vijay Mallya, the former owner of Kingfisher Airlines, defaulted on loans worth around Rs. 9,000 crore taken from various banks. He fled the country to avoid legal action.
PNB Scam (2018)
The Punjab National Bank (PNB) scam involved fraudulent transactions by Nirav Modi, a diamond merchant, and his uncle Mehul Choksi. The duo used fake bank guarantees to obtain loans worth around Rs. 14,000 crore from PNB.
DHFL Scam (2019)
The Dewan Housing Finance Corporation Limited (DHFL) scam involved fraudulent transactions and siphoning off money by the promoters of DHFL. The scam was worth around Rs. 20,000 crore.
Franklin Templeton Scam (2020)
Franklin Templeton Mutual Fund suspended six of its debt funds, citing liquidity issues. The funds had invested in low-rated securities, and the company was unable to sell these securities to repay the investors. The scam was worth around Rs. 28,000 crore.
In conclusion, the Indian stock market has witnessed several scams over the years, resulting in significant financial losses to investors. It is essential to have strict regulations and oversight to prevent such fraudulent activities in the future. Investors should also exercise caution while investing and conduct thorough research before making any investment decisions
| Serial No. | Scam Name | Year | Amount (in crores) |
|---|---|---|---|
| 1 | Harshad Mehta Scam | 1992 | 4,000 |
| 2 | Ketan Parekh Scam | 2001 | 1,250 |
| 3 | Satyam Scam | 2009 | 7,800 |
| 4 | Sahara Scam | 2011 | 24,000 |
| 5 | NSEL Scam | 2013 | 5,600 |
| 6 | Saradha Scam | 2013 | 4,000 |
| 7 | Vijay Mallya Scam | 2016 | 9,000 |
| 8 | PNB Scam | 2018 | 14,000 |
| 9 | DHFL Scam | 2019 | 20,000 |
| 10 | Franklin Templeton Scam | 2020 | 28,000 |
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Top 10 Stock Market Scams in India
