look news india
RPG Group Chairman Harshad Goenka has warned retail investors that the era of price-rigging scams like Harshad Mehta and Ketan Parekh are back and it is important to be careful to avoid huge losses from such scams amid the unprecedented rally in the stock market. Is. Some promoters, especially in Kolkata, in collusion with Gujarati and Marwari brokers, falsely show excessive profits through profit entries, thereby driving up the share prices of their companies to unrealistically high levels. In such a situation, small investors should avoid such mistakes.
Goenka gave this advice to retail investors in a post on the X platform. He said in the post that during the current stock market boom, the wrongdoings committed by Harshad Mehta and Ketan Parekh have come to the fore again and have become more prevalent, especially in Kolkata. He also intervened in the post and requested SEBI and the Union Finance Ministry to investigate such scams before retail investors suffer huge losses.
Goenka's post came as the stock market rallied sharply on Friday with the Sensex closing below the 74,000 level after an intraday fall of over 1,600 points and the volatility index rising 9 per cent.
How did Harshad Mehta commit the scam?
In the 1990s, Harshad Mehta used loopholes in the banking system to inflate prices in selected stocks using large sums of money obtained from banks. Due to this, there was a race among small investors to buy these shares and then when this fraud came to light, the prices of these shares fell and it was the turn of these investors to cry overnight. After such irregularities committed by Mehta, there was a huge rise in Sensex at one time. Mehta exploited the loopholes to siphon off the money. An amount of Rs 500 crore was received.
What is profit entry?
Often companies do not incur some expenses so that profits appear higher. If the company incurs any loss, it is shown late in the books of account. Apart from this, by changing the accounting policy, more profits are shown.