With the release of director Hansal Mehta’s web series ‘Scam 1992’ about the once flashy, brash, flamboyant, then disgraced and incarcerated and eventually dead stockbroker Harshad ‘Big Bull’ Mehta, I am reminded of my meeting with him sometime in 1989-90.
“What you call crooked, saheb,” said Harshad Mehta to me, “is actually pure street smarts.” And then the stockbroker smiled as if particularly pleased at what he was about to say and how he had set up that punchline, “Or shall I say Dalal Street smarts?”
That was sometime in 1989-90 when I met the Bombay stockbroker, who took India’s stock market on a dizzying rollercoaster ride that eventually ended in his incarceration and death in jail due to heart attack on December 31, 2001. That is apart from a loss in hundreds of millions of rupees to various financial institutions, many of whose bosses were complicit in the scam which was at once ingenious and yet quite ordinary. The meeting took place in Mehta’s sprawling 15,000 square feet apartment on Bombay’s Worli Seaface. I noticed before going up to his apartment that his black Lexus was parked at a strategic spot where it could be seen prominently.
Remember those were still the pre-economic liberalization days and owning a Lexus, which reputedly cost him 4.7 million rupees then, was the pinnacle of luxury for the emerging nouveau riche like Mehta then. He made no apology about his wealth,
By the time I met Mehta had already been a darling of the business media that lapped up his every move as brilliant. That he sounded so self-assured in a brass-knuckle sort of way and dressed well in the late 1980s-early 1990s style coupled with his ability to project bragging dressed up as insights worked wonders with the generally unsuspecting business media.
My impression of Mehta from some three decades ago was that of someone who was driven by an unusual ambition to break into what he considered Bombay’s corporate elite in defiance of his own rise from a lower middle class Gujarati family. He seemed to think it was his manifest destiny to be both very wealthy and very successful. At the same time though, in a streak somewhat reminiscent of Dhirubhai Ambani, small associations seemed to give him particular joy. For instance, I also remember that his face brightened up when he found out that my family too was from Rajkot in Saurashtra where he was born. Dhirubhai had a similar reaction when he came to know that I too was from Saurashtra like him.
Speaking of manifest destiny, it often came out in the form of his aphorisms such as “I don’t create waves, I ride them.” In an era well before the internet, mobile phones and, of course, social media Mehta had figured out a way to make his presence felt. At one point in his conversation with me he got up to face his glass window facing the Arabian Sea, somewhat reminiscent of the scene from Amitabh Bachchan’s ‘Deewar’, and said to me in Gujarati, “Vat thi kamayo chhun. (I have earned it with confidence.) Vat in today’s parlance would be swag. “Aa dariyo dekhay chhe ne samey, that’s me. I will always be around.” (You see the sea from here, that’s me),” he declared so effortlessly that one might have suspected he had practiced those lines. He had not. During my interaction as well as his interactions with the media then, those lines came to him easy.
The purpose of this short post is not to dwell on all the complex ways in which Mehta gamed the subterranean criminal impulses within the leaderships of the Indian banking system and other financial institutions. Let me just say that he hit upon a few ingenious ways to exploit the system. He used banks’ money to play the share market by promising them high interest rates. In return, he would have the banks transfer money into his personal account. The ploy would be to buy securities from other banks.
Another way was to leverage the bank receipt or BR. The BR was a way in which the seller of government securities gave the buyer of those a BR rather than the actual transfer of the securities. Mehta’s criminal enterprise was to find pliable banks which would agree to issue fake BRs. He was said to have found a couple of small cooperative banks to do that for him for a consideration under the table for its managers. He then used those fake BRs to raise actual money from established banks. The sums were huge and at its height the scandal was supposed to be to the tune of sixty billion rupees.
One of the constant refrains that Mehta had after his life as a stockbroker began to unravel in the face of what was clearly criminal manipulation of the Bombay stock market by him and those close to him was to insist that had the system let him play he would have ensured that everyone made money. Clearly, that was an empty boast.
I remember him making another extravagant claim. He used to boast that if the rupee was made convertible he could bring in $3 billion in investment on his own strength alone. I had asked him about that to which he said rather cavalierly, “As long as no one stands in my way, I can deliver that.”
Mehta had a weird sense of self-assurance about him. In his mind he had absolutely no sense of having done anything wrong at all. It was that delusion that prompted him to make a stunning claim in 1993, by which time I had already shifted to New Delhi. On June 16, 1993 he claimed publicly that he had paid India’s Prime Minister P V Narsimha Rao Rs 10 million (one crore) to get him off the hook in the huge stock-banking scandal.
There was a time when Mehta’s personal portfolio was worth twenty billion rupees. He would write personal checks of five billion rupees to the State Bank of India and two billion rupees to the Bombay Stock Exchange to cover his stock purchases. In keeping with his panache to gain public attention he paid 260 million rupees in personal income tax in March 1993, making him India’s highest individual taxpayer then.
It was in April, 1992 when journalist Sucheta Dalal exposed Mehta’s racket bringing his life crashing down. I vividly remember a photograph of Mehta looking disheveled and holding a plastic bag coming out of a police van. He looked clearly beaten down. He was banished from trading but continued to giving stock market tips. He was convicted in September, 1999. About two years later he died of a heart attack while being in criminal custody in the Thane prison. He was 47.
Bombay’s stock brokers, a vast majority of whom was and still is Gujaratis, treated Mehta as a folk hero for quite some time. Many of them called him the “Amitabh Bachchan” of the stock market, a sobriquet he was not particularly enamored of as far as I can tell. “I deal with real hard world, not a fictional one,” he told me.
My enduring image of Harshad Mehta, who was clearly devoid of any scruples and was perhaps even a sociopath, was him standing by his sea-facing apartment window in a ballooning white executive shirt, specially tailored trousers and a paisley patterned yellow tie. “I always wear a suit and tie. It gives you confidence,” he said.
One typically Harshad Mehta claim that he made after being convicted was that he would have paid back every single penny to anyone he owed were he allowed to operate in his own unfettered ways. He clearly had the mind of an autocrat.