India's 'Big Bull' broker dies

The 1991 scandal led to an overhaul of market rules

Leading Indian stockbroker Harshad Mehta, who was at the centre of India's worst financial scandal nearly 10 years ago, has died in police custody.

Mr Mehta died in hospital in Thane district in the western Indian state of Maharashtra.

Smaller investors saw savings wiped out

He was taken there from jail when he started complaining of chest pains.

He had been arrested in November, along with his two brothers, as part of an investigation into shares missing from 90 blue-chip companies.

He was known as the "Big Bull" for the huge sums of money he made from the Indian capital markets after economic liberalisation in 1991, but was briefly imprisoned the following year for his role in a billion dollar scam.

The scandal led to a big fall in the market and caused huge losses to Indian and foreign banks.

Speculating

Mehta and his associates were implicated in a scheme to divert public funds from government securities transactions so that they could speculate on the market.

The market, which had soared to new heights, collapsed.

Thousands of smaller investors saw their savings wiped out, and several senior officials resigned.

The scandal led to an overhaul of banking operations in India, including the role of foreign banks.

Still influential

Mehta, who spent a brief period in prison after the scandal, was barred from trading.

However, rumours that he had been buying stock through proxies was often enough to send share prices soaring.

Originally from Raipur in the central Indian state of Madhya Pradesh, he arrived in Bombay with little to his name.

He worked as a clerk in a government-owned insurance company and spent his lunch hours at the stock exchange observing traders at work.

He started as a sub-broker and thereafter began his rise to become the most powerful figure in the Bombay markets.