From minor scams like Gpay links to huge ones, financial scams have become common in India. Won’t be wrong to say that the fraud rates have increased to such an extent that people have become cautious of everything going around.
But being a victim of these scams has nothing to do with being savvy. Because honestly, even the smartest ones out there are getting wrapped up in the financial con. In just a blink of an eye, one could lose their entire life savings. The scammers are milking away at all the civilized methods to steal money from unsuspecting victims.
Enough chatter, now let’s take a look at some of the top financial scams in India.
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Harshad Mehta Scam
First up, we have one of the most popular financial scams in India that is the Harshad Mehta Scam. What’s the story? Let’s take a look. 👇
Harshad Shantilal Mehta and other bankers were involved in the Bombay Stock Exchange market manipulation that happened in 1992 Indian stock market fraud.
Harshad executed this by utilising dishonest employees to sign fake checks and exploiting weaknesses in the market. They used fake cheques and other tricks to make stock prices go up by 40 times and took over 10 million USD from investors.
This caused a lot of problems and was the biggest financial scam in India’s history, worth almost 5,000 crores. 🤯
And that’s not it! They also used fake bank receipts and stamp paper, which showed the loopholes in India’s financial system.
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Nirav Modi Scam
One of the most mind boggling financial scams whose investigations are still undergoing. This scam made a lot of buzz so let’s take a peek at the story 👇
To pull off a refined financial scam, Nirav Modi and his uncle Mehul Choksi joined hands with some employees of Punjab National Bank (PNB).
Now these corrupt PNB employees gave Nirav’s firm with illegal and unauthorized Letter of undertaking without any security or limitations on credit. They indulged in these illegal activities using the SWIFT system, which was not updated in the bank’s primary record-keeping.
The Indian bank branches abroad trusted PNB and passed the loan to Nirav without a thorough examination process. Now, these LoUs were used by Nirav Modi and his team members for various purposes, including the repayment of prior debts. This went unchecked for seven years, resulting in a huge financial loss.
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Vijay Mallya Scam
How could one forget the financial scam that left everyone shook?
This financial scam made so many headlines that one cannot even imagine!
So, there was this big scandal involving Vijay Mallya, a rich guy who owned an airline called Kingfisher Airlines in India.
The airline went broke and was not able to pay off the bills, and it turned out that Mallya had allegedly used the company’s money for his personal possessions and tucked it in overseas accounts.
The Indian government gave him the nickname of “willful defaulter” and tried their best to get him back to India to face charges of financial fraud. But he fled away to the United Kingdom. It’s been a crazy legal drama, and everyone’s talking about it as one of the biggest scams in India’s history.
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Sachin Tendulkar Tax Escaping
Back in 2011, the superhero cricketer Sachin Tendulkar had a dispute with an income tax officer.
In relation to the Rs 5.92 crores that Sachin got between 2001-2002 and 2004-2005, he received a sizable sum of money from organizations like ESPN-Star Sports, PepsiCo, and Visa., and for that, he requested a tax deduction.
The officer disagreed, stating that Sachin could not claim the deduction because he was merely a cricket player and not an actor. The Income Tax Appellate Tribunal then heard Sachin’s appeal of this judgement.
The topic caused debate, and many began to speculate about Sachin’s acting abilities. As a tax on this money, the government demanded that he pay Rs 2,08,59,707 to them. But Sachin struck gold when the Tribunal ruled that he wasn’t required to pay close to Rs 2 crore for TV advertisements.
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Satyam Computer Scam
So, back in 2009, there was this huge financial scam called the Satyam Computer scam.
It came across as a major shocker because the chairman of Satyam Computer Services, Ramalinga Raju, faked the company’s financial statements and robbed a whole lot of money.
What he did was basically boosted the numbers and made it look like the company was doing way better than it actually was. Turns out, he stole more than a billion dollars.
As you can imagine, it was nothing less than a major accounting fraud. When the news spilt out in the market, it left everyone surprised.
Of course, the chairman was caught, and the whole thing exposed serious issues with corporate governance and financial reporting in India. It acted to be a wake-up call for the business world and showed how even big companies can fall prey to financial fraud. Crazy, right?
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CommonWealth Games Scam
Everyone just loves the Commonwealth Games, don’t they?
Well, storytime! In 2009, there was a huge financial scam that went down in the Commonwealth Games. There were crazy allegations of corruption and embezzlement
Just to refresh your memory, the Commonwealth Games is a significant international sporting event where athletes from different nations compete against each other.
So what exactly happened?
Basically, the reports said that the management gave an increased cost of the construction project and mismanagement of the funds that were specifically given for the athlete’s accommodation and facilities.
The news travelled very fast and soon people named it the “Commonwealth Games scam” aka the CWG scam.
The scandal left a bad taste in everyone’s mouth and led to a lot of investigations, arrests, and finger-pointing. It was a big wake-up call for accountability and transparency in sporting events.
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Videocon ICICI Scandal
Another financial scam that made headlines in India was the Videocon ICICI Scandal.
So what happened is, the Chairman of Videocon “Venugopal Dhoot” was accused of being involved in a bank fraud case with the ICICI bank and was arrested by the CBI.
He was taken into custody on accusations of paying 64 crore rupees in bribery in exchange for a 1,875 crore loan from ICICI Bank for the Videocon Group. Chanda Kochhar, the ex-CEO of ICICI Bank, and her husband were also taken into custody for their role in the scam.
The Kochhar couple was charged by the CBI for obtaining help in acquiring a share of NuPower Renewables Ltd. shareholding; several businesses were mentioned as participants in the scam.
Six loans worth 1,875 crores that ICICI Bank had approved for the Videocon Group eventually became non-performing assets, causing the bank to suffer a $1,730 crore loss.
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Saradha Ponzi Scam
This is one of the oldest financial scams in the history of top financial scams in India. However, it’s still thriving strong in India.
The basis of the scheme is that the scammer promises high returns on investments and encourages people to invest their money. But instead of actually investing the money, the scammer uses the money from new investors to pay off the earlier ones.
This creates a never-ending cycle of new investors, and eventually, the scammer disappears with all the money. Some of the most notorious Ponzi schemes in India include the Sahara scam and the Saradha scam.
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2003 Stamp Paper Scam
Moving on, we have the famous Abdul Karim Telgi’s stamp paper financial scam. This financial scam was related to the printing and making of fake stamps and stamp papers.
Telgi, who initially started as a vendor and then went on to work in travel companies, came out with the idea of fake stamps. Of course, stamp papers were a necessity at that time for various legal purposes and they were constantly in high demand due to their short supply.
To print the stamp papers, he obtained the outdated equipment that Nashik Security Press had deactivated and sold off at auction. He sold the stamp papers for 100 each and had many customers, including banks, brokerage firms, and insurance companies.
To wrap it up
Financial scams have been a major problem in India, thus it’s important to exercise caution when investing. Before investing in any plan or business, always do your homework. Also, be sceptical of any investment opportunity that guarantees a profit with no risk. It’s crucial to keep informed, stay safe, and alert the right authorities to any questionable conduct.
In fact, given that a large percentage of Indians use Gpay, Phonepe, and other apps, financial scam has spiked in India along with the use of electronic payments even more.
The financial scam is therefore implied by a failure to handle financial resources morally and legally. Online frauds with common instances include lottery fraud, phishing schemes, and fraudulent e-commerce websites.
Today, scammers have become so creative with their ideas and methods of financial fraud that it is becoming harder to understand and spot their strategy.
