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The NSEL scandal has wiped out hundreds of crores of many investors and shows how manipulation, lack of knowledge and greed can cause tremendous losses to investors; even worse, they can also bring the financial system down to the brink.
India has seen quite a few scams over the years due to the manipulations and greed of a few. Here are the top five.
1992: Harshad Mehta scam
Harshad Mehta siphoned of funds amounting to Rs 4000 crore from various banks to manipulate stocks between April 1991 and May 2002. His scam was exposed as the markets crashed and in the process he conned banks and investors. He died in 2002
1996: CRB Scam
Chain Roop Bhansali collected money from the public through mutual funds, fixed deposits and debentures. He also raised funds through companies that were non-existent and transferred it to shell companies or others who invested with him. His scam came to light once he could not raise any more money. The scam resulted in a loss of over Rs 1100 crore
2002: Ketan Parekh scam
Ketan Parekh was invovled in circular trading and stock manipulation throughout 1999-2001 in a host of companies. Like Mehta, he too borrowed from banks like Global Trust Bank and Madhavpura Mercantile Co-operative bank, and manipulated a host of stocks popularly known as K-10 stocks. Ketan Parekh has been banned from the stock market.
2009: Satyam Scandal
Ramalinga Raju confessed that he had cooked up the accounts of Satyam Computers and that the cash and bank balances were inflated by Rs 5040 crore after a failed attempt to acquire Maytas. Ramalinga Raju was recently released on bail. Satyam Computers has since be acquired by Tech Mahindra.
2013: Saradha group scam
The Saradha group ran a wide variety of collective investment schemes that collected money from the public. The Ponzi scheme collapsed and caused an estimated loss of over Rs 4000 cr with more than 1.4 million investors affected most of them small savers. The Union government launched a multi-agency probe to investigate the scam.
