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The recent SonyLiv web-series Scam 1992 has brought one of the biggest stock market scams to the masses. The story of Harshad Mehta and how he brought the Bombay Stock Exchange to its knees has been enthralling audiences across the country.

If you have watched the web-series already, you will be familiar with the magnanimity and sheer charisma that was Harshad Mehta. In the words of Sucheta Dalal, “Harshad Mehta was the darling of the stock markets – a superstar whose popularity that begun to rival that of a matinee star.”

The story, in fact, is so captivating, the other characters involved have also garnered quite a bit of interest and attention. One such character is that of Pranav Sheth. Played by Jai Upadhyay in the series, many are of the opinion that this character is based on Ketan Parekh, another stockbroker who was also charged with the orchestration of a securities fraud. 

According to BookMyShow, “There’s Pranav Seth (Jai Upadhyay), who is based on Ketan Parekh, a former stockbroker who worked for Mehta’s firm that was involved in the scam. Parekh orchestrated another infamous scam after Harshad Mehta, and who was sentenced to three years of imprisonment in 2018 for manipulating the stock market.”

However, it is more likely that this character is actually based on another Mumbai based stockbroker called Pallav Sheth.

It so happens that the less we know about a person, the more interesting they seem. There is just something about the mystery of the unknown that draws us in. The intrigue surrounding this character is partly due to the fact that there is not much known about him. 

Let us attempt to clear the fog surrounding Pallav Sheth and piece together his involvement in the Harshad Mehta scam.



As written in The Scam: Who Won, Who Lost, Who Got Away by Sucheta Dalal and Debashish Basu, “Rotund and jovial, (broker Pallav) Sheth made crores rigging the shares of the India Tobacco Company (rrc Group).”

He was a Mumbai-based broker who was associated with Harshad Mehta. After the fall of the Big Bull of Dalal Street, the extent of his involvement became more clear and he was charged with a number of cases related to the securities market. 

Before we talk about the music that Pallav Sheth had to face after the dominoes started falling, let us first understand his role in the Harshad Mehta scam.


Harshad Mehta was famous for rigging the shares of several companies. He would use insider information and take large positions based on that information. 

For example, at the beginning of the 1990s, Harshad Mehta bought shares of Associated Cement Company (ACC) in large amounts. In fact, Mehta started such a bullish frenzy about ACC that the price of the stock rose from Rs. 200 to about Rs. 9,000.

The rate of return in this case is about 4,400%, which is almost unthinkable in the stock market.

Not only that, Harshad Mehta took it one step further. The way he was able to take such large positions in the stock market, especially on the bullish side, is that he used bank funds to finance them. According to The Quint, investigation revealed the “diversion of bank funds worth Rs 3,500 crore to a group of stockbrokers, led by Harshad Mehta.”

Now, it was later revealed that Harshad Mehta himself did not always act on such information himself. A number of brokers were associated with this scam and were brought under investigation as well. 

It is commonly believed that sharing is caring. In fact, the tagline “Khushiyan baatne se badhti hain” was popularized by the popular Cadbury campaigns.

Harshad Mehta, it seems, believed in this saying quite diligently. He had a network of brokers with whom he shared insider information about companies so that they, too, could have a slice of the cake.

Accordingly, Pallav Sheth made large amounts of profit by taking positions in the shares of India Tobacco Company. As per reports, the returns from this stock earned him a few odd crores at least.


Sucheta Dalal’s expose was not limited to just Harshad Mehta, it extended to the entire group. She followed the money trail, and everyone is crossed through. The excerpt below is from her column on the scam of 1992.

“Rajendra Bhatia, the former Vice President of the Bombay Stock Exchange, who is also indicated for the 1998 rigging involving Sterlite, Videocon and BPL was also called in for interrogation. Similarly, Jaiprakash Industries shares routed through Pallav Sheth and Mukesh Gupta also came in for questioning.”

Thus, we see that his involvement in the 1992 securities scam is far from negligible.

If you had thought that the story was over at this point, think again. Pallav Sheth is far from a one-trick pony, and that is probably what makes his story so interesting. His name comes up with several other cases as well, like the Canfina case, and the case involving Fairgrowth Financial Services Limited (FFSL) and Andhra Bank Financial Services Limited (ABFSL).


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Now that we have understood Pallav Sheth’s role in Harshad Mehta’s core team of brokers, let us move on to the other cases that he is also involved in.

According to a 2008 article by Economic Times, “The long arm the of law has finally caught up with former BSE brokers Ketan Parekh, Pallav Sheth, Hiten Dalal and Shrenik Jhaveri. All four have been sentenced to one-year rigorous imprisonment by the special court trying the various cases related to the 1992 securities scam. They are alleged to have misappropriated Rs 47 crore belonging to Canfina, the then non-banking financial arm of Canara Bank.”

How did this scam take place?

This is a case of falsified Ready Forward deals. Sheth and the other brokers who have been named above used these Ready Forward deals to divert funds from Canfina into their own accounts. These funds were then utilized to finance positions in the stock market.

Now, you must be wondering how Ready Forward deals normally work.

Let us attempt to understand that with the help of an example.

There are two companies X and Y. 

Company X requires liquid cash immediately to make some important payments. However, banks are not ready to give any cash credit to X on such short notice. X does not have much credibility or assets. The one thing that X does have is the latest edition of the Aston Martin Vanquish. 

So, Company X then approaches Company Y and asks for help. Y is in a charitable mood, and decides to help out X. Accordingly, Y tells X to sign over the Aston Martin Vanquish for a period of one month. In exchange, Y will give X the cash amount that is required. 

They agree that Y will return the Vanquish after the one-month period is over, and X will pay back the amount to Y, with some interest.

This agreement between X and Y is called a ready forward transaction.

Now, according to the charges against Pallav Sheth and company, they arranged for fake Ready Forward agreements between Canfina and Canbank Mutual Fund. This means Canfina paid an amount to Canbank Mutual Fund in exchange for a particular security. 

But the amount never reached Canbank Mutual Fund. Instead, somehow found its way into the accounts of the brokers in question. They then used the money in the stock market. 

In fact, Canbank Mutual Fund and Canfina both adjusted their own records to hide these fraudulent activities and to cover for the brokers involved.

All the involved brokers were sentenced to one year of rigorous imprisonment by the Bombay High Court. Pallav Sheth was allowed to come to a financial settlement with Canara Bank by the Supreme Court.


Fairgrowth Financial Services was established in 1990. According to the investigation by the Central Bureau of Investigation (CBI), Fairgrowth and Andhra Bank Financial Services were involved in an Rs. 1,700 crores fraud. This fraud involved the use of fake Security Receipts.


What are security receipts?

Security Receipts are generally issued by Asset Reconstruction Companies (ARCs) in exchange for a particular security. It is a promissory note of sorts and contains evidence of the purchase of any asset or security.

Soon after its establishment, Fairgrowth found themselves amidst a severe liquidity crisis, and they started borrowing from other sources to cover their dues. Andhra Bank Financial Services was one of the banks that they borrowed from.

Hair growth was charged with the use of Security Receipts which are not backed by any securities to raise funds from ABFSL. This scam took place in the eleven-month period from July 1991 to May 1992.

Now, Sheth’s involvement in this matter is interesting.

When CBI charged Fairgrowth with the security receipts fraud, Fairgrowth, in turn, dropped the ball on Pallav Sheth. FFSL claimed that Sheth actually owed an amount of Rs. 70 crores to the firm. 

Out of this amount, Sheth repaid a meagre Rs. 5-6 crores. He defaulted repeatedly on the remaining amount. In fact, some of his assets were even auctioned off in a desperate bid to recover some of the funds.

It was only in 2018, that this case was finally resolved. A special court in Mumbai found five of the involved parties to be guilty. This included people from Andhra Bank Financial Services as well as Fairgrowth Financial Services. 

Ironically, Pallav Sheth was acquitted and released of the charges on him.

Thus, we come to an end to this fascinating story. 

Sheth has even been associated with Bal Thackeray’s nephew Raj Thackeray. According to Outlook India, “Sheth’s books of account submitted to the court shows that Raj Thackeray, his wife Sharmila and his father-in-law received more than Rs. 3 crores.”

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