Subscribe to enjoy similar stories. The flapping of a butterfly’s wings can cause a typhoon halfway across the world. That seemingly outlandish notion gave rise to the Butterfly Effect, the idea that tiny events can trigger huge, nonlinear impacts.
Haridas Mundhra, India’s first big financial scamster after independence, serves as a textbook example of this phenomenon. His actions caused tremors in the stock markets and unleashed a political storm in Parliament. Mundhra’s journey is a classic rags-to-riches story gone rogue.
Read this | The unravelling of a financial titan: Ravi Parthasarathy and the IL&FS scandal The Calcutta-based stock speculator, who began his career selling light bulbs, was an ambitious young man with one burning desire—to make money, by any means necessary. Unfortunately, most of his methods were less than honest. His playbook was depressingly familiar: he would buy shares in obscure companies, inflate their stock prices through misinformation and circular trading, then use those inflated holdings as collateral to secure loans.
With fresh funds in hand, he would acquire stakes in other firms, notably targeting British companies left behind by the colonial exodus. These companies’ cash reserves fuelled his acquisition spree, allowing him to amass a vast empire worth several crores. But as his empire grew, so did the list of his transgressions.
In 1956, the BSE Ltd (then the Bombay Stock Exchange) indicted him for selling forged shares. Yet, Mundhra was far from finished. With the audacity typical of his ilk, he soon found a way back into business.
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