Category: Education

Presentation Description

various scams in india


Presentation Transcript

Major scams in India : 

Major scams in India The Top Scams in India 2G Spectrum Scam

2G Spectrum Scam : 

We have had a number of scams in India; but none bigger than the scam involving the process of allocating unified access service licenses. At the heart of this Rs.1.76-lakh crore worth of scam is the former Telecom minister A Raja – who according to the CAG, has evaded norms at every level as he carried out the dubious 2G license awards in 2008 at a throw-away price which were pegged at 2001 prices 2G Spectrum Scam

Q. What is the 2G Spectrum Scam? : 

In 2008, the union government awarded pan India licenses and second generation telecom spectrum to 9 companies in 122 circles for offering mobile telephony services. These licenses were awarded in an arbitrary and non-transparent manner for a paltry sum of ` 1658 crores, which was the price discovered in 2001, when the teledensity was very low. Q. What is the 2G Spectrum Scam?

Q. What should the government do? : 

recover the scam money by canceling the licenses and issue new licenses Enact a comprehensive anti-corruption law and create an Independent Anti-Corruption Commission (IACC). • Enact a Windfall Profits Tax law (on the lines of the UK law 1997) Enact a False Claims Act (on the lines of the U.S. law). Q. What should the government do?


Harshad Mehta known to be “Big Bull of the trading floor” was an Indian stockbroker and is alleged to have engineered the rise in the BSE stock exchange in the year 1992.He and his associates draw 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. The broker was dipping illegally into the banking system to finance his buying. The amount that was involved in this scam was approx. to Rs. 5000 crs. HARSHAD MEHTA SECURITIES SCAM

How Harshad Mehta financed his deals? : 

Harshad Mehta worked on the mechanism of READY FORWARD (RF) DEALS. It's a secured short-term (typically 15-day) loan from one bank to another. The bank lends against government securities. The borrowing bank actually sells the securities to the lending bank and buys them back at the end of the period of the loan, typically at a slightly higher price. The deal was done between the banks through brokers for commissions. In this settlement process, deliveries of securities and payments were made through the broker. That is, the seller handed over the securities to the broker, who passed them to the buyer, while the buyer gave the cheque to the broker, who then made the payment to the seller. Thus , both the parties may not know each other. It was this idea that made the mind of Harshad to involve into the modus operandi. Harshad in his scam took the help of Bank Receipts. In a ready forward deal, securities were not moved back and forth in actuality. Instead, the borrower, i.e. the seller of securities, gave the buyer of the securities a BR. A BR “confirms the sale of securities. It acts as a receipt for the money received by the selling bank. Hence the name - bank receipt promises to deliver the securities to the buyer and the seller holds the securities in trust of the buyer. Having figured this out, Mehta needed banks, which issue fake BRs, or BRs not backed by any government securities. “Two small and little known banks - the Bank of Karad (BOK) and the Metropolitan Co-operative Bank (MCB) - came in handy for this purpose. These banks were willing to issue BRs as and when required, for a fee”. Once these fake BRs were issued, they were passed on to other banks and the banks in turn gave money to Mehta, obviously assuming that they were lending against government securities when this was not really the case. This money was used to drive up the prices of stocks in the stock market. When time came to return the money, the shares were sold for a profit and the BR was retired. The money due to the bank was returned. The game went on as long as the stock prices kept going up, and no one had a clue about Mehta's modus operandi. Once the scam was exposed though, a lot of banks were left holding BRs which did not have any value - the banking system had been swindled of a whopping Rs 4,000 crore. How Harshad Mehta financed his deals?


Ramalinga Raju founded Satyam Computers in 1987 and was its Chairman until January 7, 2009 when he resigned from the Satyam. In January 2009, the founder indicated that Satyam's accounts had been falsified over a number of years. He admitted to an “accounting fraud” to the tune of 7000 crore. In order to hide the company's poor performance during the quarters he indulged in falsifying accounts. Also, he had also used dummy accounts to trade in Satyam's shares, violating the insider trading norm. The amount of the scandal than grew bigger than the Rs. 7000 crore highlighted earlier. SATYAM SCAM


Madhu Koda (born January 6, 1971) is an Indian politician who was Chief Minister of Jharkhand from 2006 to 2008. He was sworn in as the fifth Chief Minister of Jharkhand on September 18, 2006 and remained in office until he resigned on 23 August 2008. He is alleged to have involved in Money laundering and mining scam. He was charged with laundering money worth over Rs. 4000 crores. In nationwide raids by the Enforcement Directorate, assets allegedly worth Rs. 4000 crore — almost a fifth of the annual budget of the state he once ruled — were unearthed. Among others, these assets were reported to include hotels and three companies in Mumbai, property in Kolkata, a hotel in Thailand, and a coal mine in Liberia. MADHU KODA SCAM

authorStream Live Help