Friday, 15 March 2013

Book Review: The Scam

Title: The Scam

Publisher: Kensource Information Services

Authors: Debashis Basu and Sucheta Dalal

ISBN: 8188154091 

India has become synonymous with scams. The past few years have consistently confirmed our belief that probity has deserted us. At a time when Cobrapost comes out with a stunning expose on how private banks deal with some of the worst kept secrets of our society, of converting black money into white and as dealings are forced out of the shadows, as the faults of banks are revealed and virtues reduced, comes a time simply called "The Scam".

"The Scam" has been written by my former editors Mr. Debashis Basu and Ms. Sucheta Dalal, both eminent financial journalists. It maps the extraordinary story of two scams that rocked India separated by a nine year gap. The first scam took place in 1992 commonly known as the "Securities Scam" with the key player being stockbroker Harshad Mehta. The scam shook the nation's conscience as it was the biggest Indian stock market scams then as Indian banks, businessmen, brokers, foreign banks, mutual funds and politicians worked in coalition to create a false bull market that ended in a remarkable meltdown. 

The second scam that the book explores is the scam of 2001 that was caused by the technology bubble across the world and simultaneously led to the stock market booming in India.  The key player of the 2001 scam was former stockbroker Ketan Parekh. This scam was an important one as promoters of listed companies, overseas corporate bodies, cooperative banks etc. willingly handed over money to Ketan Parekh. The scam caused the Parliament to set up a Joint Parliamentary Committee and held nearly 105 sittings. 

The book is an inside account of greed, corruption and follies, while independent market regulators did not react to the scam. The book weaves through a gripping narrative style minus the financial jargon. The book succeeds in giving us a true picture of India's biggest stock market scams and also illustrates what went wrong in the scams. The authors skillfully explain and demystify the makings of the scams and illustrate how things worked near the Bombay Stock Exchange while creating a compelling narrative and introducing us to Harshad Mehta and Ketan Parekh. 

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