RPG Group Chairman Harsh Goenka has warned retail investors of suffering ‘severe losses’ amid the booming stock market as malpractices of Harshad Mehta and Ketan Parekh era are back, particularly in Kolkata.
According to the business leader, stock prices are being driven to unrealistic levels as promoters are inflating profits (through profit entry) in nexus with Gujarati-Marwari brokers.
Also Read: Stock market news: When will Nifty 50 hit 25K, Sensex climb to one lakh?
Promoters are inflating profits (through profit entry) and in nexus with Gujarati-Marwari brokers driving their stock prices to unrealistic levels.
The tweet follows a sharp decline in the stock market yesterday, with the 30-share BSE Sensex plunging 1,000 points intraday, falling below the 74,000 mark.
RPG Group Chairman Harsh Goenka has warned retail investors of suffering ‘severe losses’ amid the booming stock market as malpractices of Harshad Mehta and Ketan Parekh era are back, particularly in Kolkata. According to the business leader, stock prices are being driven to unrealistic levels as promoters are inflating profits (through profit entry) in nexus with Gujarati-Marwari brokers.
Also Read: Stock market news: When will Nifty 50 hit 25K, Sensex climb to one lakh? Experts give this timeline
Goenka took to social media platform ‘X’ earlier today and said, ‘’With a booming stock market, all the malpractices of Harshad Mehta/Ketan Parekh era are back primarily in Kolkata. Promoters are inflating profits (through profit entry) and in nexus with Gujarati-Marwari brokers driving their stock prices to unrealistic levels. It's time for SEBI and @FinMinIndia to step in and investigate before small investors suffer severe losses.''
Goenka also appealed to top authorities including the finance ministry and capital markets regulator Securities and Exchange Board of India (SEBI) and urged them to intervene and conduct investigation to curb ‘severe losses’ that retail investors may incur due to the inflated market conditions.
The tweet follows a sharp decline in the stock market yesterday, with the 30-share BSE Sensex plunging 1,000 points intraday, falling below the 74,000 mark. The NSE's Nifty dropped by more than 200 points, slipping below the 22,450 level. Volatility index India VIX dropped nearly nine per cent to a level slightly below 15, indicating nervousness in the market.
According to some traders, the market crash was triggered by certain media reports that said the new government will bring some sweeping changes in the income tax system after the Lok Sabha election results. Finance Minister Nirmala Sitharaman later refuted the reports. ‘’Wonder where this is come from. Was not even double checked with Finance Ministry. Pure speculation.'' said Sitharaman in a post on social media platform ‘X’
What was the Harshad Mehta scam?
In the early 1990s, the Harshad Mehta scam was the most widely reported financial scandals in India's market and banking history. Mehta, a regular stockbroker at the Bombay Stock Exchange, exploited loopholes in the banking system to manipulate the stock market.
He indulged in ‘stock price rigging’ where he artificially inflated the prices of some selected stocks, creating a frenzy of buying. Mehta's malpractices led to an overwhelming rise in the BSE index. He was also accused of defrauding the State Bank of India (SBI) worth around ₹500 crore against forged cheques signed by corrupt officials and failed to deliver the securities.
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