'Nothing Comes Without a Fight': 31 Years On, Sucheta Dalal Recounts 1992 Scam

Speaking to The Quint, Dalal says that at the time, she was one of the only ones writing against Harshad Mehta.

5 min read

31 years ago, April was a big month in the life of the Bombay Stock Exchange. Sucheta Dalal, then with the Times of India, broke the story of the Harshad Mehta scam on 23 April 1992.

In an interview with The Quint, she recalls that month in 1992 when her story exposed Harshad Mehta's massive stock manipulation scheme, leading to his arrest and conviction.


Q: What do you remember about April 1992?

That day, 23 April, was such a big deal. It was like any other day until the source walked in, and there seemed to be the possibility of getting something concrete about what Harshad Mehta was doing. In fact, 23 April happens to be my mom's birthday. So it was a little relaxed, I was calling them up and everything. By the next day, it was a big story. Forget about 500 crores, which is what we thought we were chasing. Even five crores mattered at that time.

We realized that it was a huge allegation to make. But government securities or gilt-edge transactions were of that size. If you look at what happens on the national stock exchange, then every transaction that happens in a few microseconds or milliseconds is about millions of dollars, that is, crores of rupees.

Q: Why did people not catch on to this earlier?

As I've said in my book, nobody had any idea of this market. It was completely shadowing people who traded in government securities. It was more like a physical thing, or a phone transaction, based on nothing to do with equity markets.

I don't think there was any journalist who was covering it on a regular basis, apart from printing RBI press releases that said interest rates have gone up, or maybe occasionally if RBI said that bond rates have come down. Nobody really covered anything other than that.

Q: Do you think there was any element of luck involved in your investigation?

There was luck involved, 100 percent. Frankly, half or three-fourths of the journalists who covered Harshad Mehta were his fans. Look at the cover stories that were carried by everyone. I was one of the only ones who was writing against him, skeptical about where his money came from. I was the one who wrote about this big ad, showing off, saying that Harshad Mehta is a liar. Nobody else was writing it. So if you ask me, was there luck? I think, yes.

Q: And the source?

The source was lucky that they came to the Times Of India went to the news editor, who then brought them to me, because I'm the only idiot who would have written it, chased it, or believed it, because I was covering the market for nearly 10 years before that. I had the contacts because nobody covered government securities.

I had sources who I could call up and say, “Look, this person has come, and this is what they say”. So, my first call to one of my sources was, “Is this even possible?” And they said, “Yes, in terms of numbers, it is possible. But I find it hard to believe. Let me start finding out in my own way”. They came back after some time and said, “There is a buzz about something having happened and Harshad being in trouble. But we still don't know. So let's all try and find out.”

Ultimately, I had a source in the SBI, who gave me the final confirmation from the bank. Frankly, if the source had gone to someone else, they would have probably kicked them on their backside and chased them out.


Q: Is it possible to pull off a Harshad Mehta or a Ketan Parekh today?

Are you seriously saying it's not happening all the time? I mean, it is. See the whole co-location thing that happened? I thought the NSE was the best thing that happened to Indian capital markets. I wrote a piece saying that the NSE is leading the transformation of the markets. Then there was this big scam, which I happened to break, on colocation.* I knew these people since 1992. I found it hard to believe when I got that first whistleblower letter. But by then my eyes were open to what the hell was going on in the NSE. Even I found it difficult to believe that this could happen.

Q: How difficult is it to investigate such issues?

Whether it was at that time or today, it has always been difficult. I have colleagues who have given up on stories, even when the bureau chief said, “Sorry, I'm not carrying something" because they had a vested interest. I was always the kind who fought. I've had problems with every one of my bosses.

Nothing in life comes without a fight, without putting something on the line, without losing your job, any number of times.

Even in those days, it was not a cakewalk. I was out of Times of India by 1998. And after I wrote about StockHolding Corporation, I lost my columns at the Indian Express in 2006. So, it's a price that you keep paying. At Moneylife, when we wrote about the NSE, we had a 100 crore defamation slapped against us.


Q: Are the journalists of today keeping up the standards of investigation set by journalists like you?

I think that absolutely wonderful investigative journalists are rising in India today. I mean, a lot of them are women. You need quite some courage to go and report on what happens in Uttar Pradesh on communal issues. The kind of journalism I've seen on health and medicine is fantastic. All of them are paying a price and they're still doing it.

Q: Is it harder to undertake investigations in business journalism?

In business journalism, I agree that it may be tougher. The minute you write a story about a large organization, both me and Debashish have had really large companies calling up the owners and editors, and stopping ads. I've been facing it since 1991.

In fact, in 1991, I wrote about a scheme. And you know, those days my salary was under one lakh a year, and the scheme used to give advertising worth one crore to this paper that I was working for. Do you think they wouldn’t sacrifice a journalist for that?

When you're a business journalist, you're really writing about the people who make a publication run. Without their advertising and sponsorship, no publication survives, right? So it is a little tougher in business journalism, and more so today, especially with paid news, and all kinds of sponsorship deals, and whatever. But I still think that there's great investigative journalism happening even today. 

Editor's note: In January 2023, it was reported that the Securities and Exchange Board of India (SEBI) will challenge the order of the Securities Appellate Tribunal (SAT), which set aside a Rs 624 crore disgorgement order against the NSE in the colocation scam. In March, the Supreme Court declined to stay the SAT order.

(Sucheta Dalal is a business journalist and author. She was awarded the Padma Shri, India government's third highest civilian award, based on her outstanding investigative journalism since the early 1990s. She is now the Managing Editor of Moneylife.)

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