Court orders Rs650-crore payout from Harshad Mehta's assets

A special court in Mumbai today said the union finance ministry could begin distributing Rs650 crore gathered from the liquidated assets of Harshad Mehta, the discredited stock market operator of the early 1990s.

The court has ordered the government-appointed custodian to release the amount. The main gainers will be the income tax department, the State Bank of India, its arm SBI Capital Markets, and Standard Chartered.

The court has ordered that Rs28.34 crore be paid to the income tax department, Rs26 crore to State Bank of India, Rs16.25 crore to SBI Capital Markets Ltd, and Rs346 crore to Standard Chartered Bank, a government statement said.

In March, the court had ordered the release of Rs2,200 crore, of which Rs2,000 crore went to the income tax department and the rest to State Bank of India.

Individual investors who lost out can probably sing for their money.

Known in his heyday as the Big Bull, Mehta triggered an unprecedented artificial boom on the Bombay Stock Exchange (India's only important bourse at that time).

Reminiscent of any Ponzi-type scheme in world history, the boom inveigled millions of small earners to invest in listed companies, and follow the movements of their shares breathlessly.

They found their investments virtually wiped out when the scam was exposed and the market went bust.

Mehta died in jail in 2001, when he was still being tried for cheating, forgery and stock-price manipulation. There were few mourners at his funeral.