The Harshad Mehta Scam
In the late 1960s, an upstart Gujarati businessman stirred up a revolt by selling ice cream at his father’s shop. The young man selling the frozen treat was none other than Kanphras H. Mehta- one of India’s richest men. He became India’s richest man by the age of thirty-two and remained so for the next several years. During this time, he also acquired considerable fame for his philanthropy, which included giving money to build schools and health centers. Many investors in India and abroad commended him for his good deeds. Even after he failed at his most lucrative venture, they continued to back him. They even gave him more money so that he could buy more shares in his failing company. Harshad Mehta had Charisma!
Harshad Mehta started off with a small grocery store in Ahmedabad, Gujarat, India. From there, he began investing in business ventures- which he quickly turned into profitable enterprises. He then began buying stocks on the stock market. He bought up large quantities of stock and then sold them to investors at inflated prices. Some of these investors were less savvy than others and were easily fooled by his con job. He would also convince people that his company had exceptional business growth prospects based on dubious evidence. Once his targets were on board, Harshad Mehta would convince them to send him money for shares in his business ventures. To cover his tracks, he would use a variety of clever methods to convince people that the money he received was legitimate revenue generated by his company's legitimate business dealings. In reality, much of the money he received was reimbursement from previous investors who were desperate to get their money back after being conned out of it years ago.
Unfortunately for investors, Harshad Mehta ran a fraudulent investment company- and many people figured this out too late. When he couldn't convince new investors to send him money, Harshad Mehta declared bankruptcy in 1980. He then traveled around the world giving speeches about how successful he was and attributing his failures to jealous competitors and dishonest government officials. With this kind of public relations strategy, it's no wonder Harshad Mehta remained famous even after failing at his business ventures. As long as he blamed others for his failures rather than take responsibility himself, he could continue telling tall tales about how successful he was while swindling people out of their money!
The swindles actually started getting bad press in 1985 when some of Harshad Mehta's former investors sued him for fraudulently obtaining $6 billion worth of stock shares from them over the course of several years. This was a drop in the bucket compared to what he'd already swindled from gullible customers- but it was still enough to land him in prison for two years under Indian law. After that sentence ended, many more former investors came forward with evidence against Harshad Mehtalower court case proceedings against him went forward during the 1990s and resulted in $3 billion in civil settlements for victims of his scams. To this day, estimates show that Harshad Mehta still managed to swindle billions out of investors all throughout the 1980s and 1990s!
Many famous personalities fail at becoming successful businessmen- but few manage to pull off such a complex scheme as Harshad Mehta did. He managed to con people out of their hard-earned money using charisma and plausible lies- resulting in massive losses for many people who trusted him with their finances. While many are quick to condemn con artists like Harshad Mehta as evil scumbags, they're willing to give a second chance when it suits their own purposes- resulting in additional losses down the road. That being said, it's important to realize that being a good person doesn't mean you won't ever fall victim to a charismatic scammer if you let your guard down