Chapter 7 Chapter 7 "Creating something out of nothing" and the artificial manipulation of stock prices

The figure in the Bombay stock market case - Hashdi, Mehta, is a 38-year-old Indian man.The man became a professional stock broker in 1980. After several years of painstaking efforts, he was born in a poor family and moved into a rich area in Mumbai, becoming a famous man of the moment.However, before 1988, Mehta's operating capacity was still very limited, and the scale of trading was not large, and the impact on the stock market was not enough to attract people's attention. After 1989, Mehta seemed to have "suddenly changed into a different person". The scale of stock trading was surprisingly large, so large that he could control the ups and downs of the stock market.He became the number one tycoon of the Bombay stock market.

According to newspaper disclosures, "Mai Million" paid 260 million rupees in personal income tax in 1992, making him the largest individual taxpayer in India, that is to say, he is already the richest man in India.His beach house is magnificent, and it is equipped with a golf course, which is worth 100 million rupees.He likes cars. There are as many as 29 cars of various types in his garage. His favorite Toyota car is worth 3.4 million rupees. So, how did Mehta's wealth suddenly inflate? What made Mehta "a different person" was money, the vast sums of money he could mobilize.

In many years of stock market trading, Mehta has accumulated a wealth of experience.He understands that it is true that you can make money by looking at the market in the stock market, but in the final analysis, only by controlling the stock market can you be invincible forever, and you must have huge funds to control the stock market. In 1984, he had a big fall in a stock market transaction and almost went bankrupt.That time, it was because another company that dealt in stocks deliberately lowered the stock price, and he was not financially capable of fighting it at the time.So for years he has been looking for a source of funding.

After several years of painstaking efforts, Mehta got his wish.He claims to be backed by Middle Eastern funds, with an Arab bank in Dubai as his backer.Good people believe it.Only after the scandal was exposed did people know that it was not the oil giants in the Gulf that provided funds to Mehta, but India's own banks. Every day at 8 a.m., Sitharaman, an investment officer at the bond department of the State Bank of India in Mumbai, prepares for an internal call.The caller was Hamani, the bank's deputy executive manager of the powerful fund department.He directed Sitharaman to give certain amount of bond receipts to a certain bank that day.Bonds are an important means of raising funds for the Indian government and are issued by the State Bank of India.In India, each bank can buy, sell and control a certain amount of bonds.According to reports, the total amount of such bonds flowing between banks is as high as 1.2 to 1.4 trillion rupees.The State Bank of India also buys and sells its own bonds, often in the billions of rupees.

The normal practice of this kind of inter-bank bond trading is: the buyer's bank will issue a bank bond receipt after receiving the bond, and the seller's bank will register the bond transfer status with the Reserve Bank of India, and at the same time, the buyer's bank will transfer the money to the account of the seller's bank.However, the bond receipt issued by Hamani instructing Sitharaman was different. In fact, he did not receive the bond from the seller’s bank, but issued a fake receipt. The bank registers the bond transfer and issues a check for the corresponding amount at the same time.But this check was not delivered to the State Bank of India, but to Mehta, a bond broker. Mehta used the funds to invest in the stock market to show his skills.

Since 1986, Mehta has found the entrance to the financial market. He has gradually established a special "cooperative relationship" with dozens of banks, especially the senior executives of the National Bank with strong capital, so that the National Bank, the National Bank The big state-run banks such as Housing Bank and many others became his personal coffers.It is reported that from April 1991 to March 1992, 35.6% of the bond turnover of the State Bank of India was fake transactions handled by Mehta.These banks used methods such as issuing false bond receipts and making false bond ledgers to provide Mehta with billions or tens of billions of working capital. The transfer of these huge funds was not guaranteed by any documents, but only between them. "Trust".

With such a huge capital as the backing, Mehta is naturally confident and his appetite is getting bigger and bigger. In just one year, his assets have increased tenfold, the total value of the stocks he holds is as high as 20 billion rupees, and his personal income is 20 billion rupees. billion rupees.His every move is often an important basis for many investors to judge the market situation.Mehta describes himself as a "dream seller".His dream is: In 1995, his personal assets reached 90 billion rupees, or 3 billion U.S. dollars, and he entered the ranks of the world's super billionaires.

From the above, we can clearly see that the reason why Mehta became the protagonist in the Indian stock market scandal is that he has a great ability to manipulate the stock market, and the huge amount of money he used to manipulate the stock market is entirely dependent on various illegal methods. It can be regarded as "creating something out of nothing". The phrase "creating something out of nothing" comes from Laozi's moral chapter: "All things in the world are born out of being, and being out of nothing." This is a philosophical point of view.But that's not what the plan says. In the first strategy of the second set of enemy battle strategies in "Thirty-six Strategies", there is the following explanation for "creating something out of nothing": "It is a lie, it is not a lie, it is actually a lie. Shaoyin, Taiming, and the sun." Meaning It is to deceive the enemy with false appearances, but the falsehood cannot be used to the end, but there are real things hidden in the false appearances.In this process, the illusion gradually becomes the truth. "Nothing" is an illusion to confuse the enemy, while "yes" is a real action attempt under the cover of illusion.True and false, false and true.

When using this meter, you should pay attention to two situations.First of all, use tactics according to the weakness of the enemy commander's personality. For example, some generals are simple-minded and easy to trust, and some generals are too cautious and indecisive in deploying troops. For these people, you can use "creating out of nothing" to deceive them; secondly, We must seize the opportunity, when the enemy is confused, change from falsehood to reality, and strike the enemy by surprise. Showing the enemy "yes" with "nothing" is a deception. After a long time of deception, it is easy to be discovered by the enemy. "Existence" is born out of "nothingness", which is from emptiness to reality. "Nothing" is not enough to defeat the enemy, but "being" can defeat the enemy.

If the strategy of "creating something out of nothing" is used properly, it can be said to be changeable and mysterious.But like other tactics, "creating something out of nothing" can be used by us as well as by the enemy.Therefore, generals should always be on guard against their opponents using this tactic in war.Similarly, for the majority of stockholders, they should always beware of some lawbreakers in the stock market, such as "maid million" and the like, "creating something out of nothing" can be said to be their special "good" plan to harm the public interest and gain selfishness.

In order to help the majority of stockholders distinguish the true from the false, and prevent others from using it, we will introduce some tricks of "creating something out of nothing" commonly used by illegal investors in the stock market. For example, these lawbreakers often intentionally or unintentionally spread some rumors to confuse the public, so as to influence people's stock investment tendency, intentionally spread the false profit and loss status of a certain company, so as to affect the company's stock trading and stock price rise and fall , spread false news about a certain stock price going up or down, in order to manipulate the decline and rebound of the stock price, use individuals with different identities, open multiple bank accounts, or use the method of mutual offset transfer, etc., artificially Carrying out false short-buying and short-selling transactions, causing violent fluctuations in the stock market; bribing government officials to obtain certain operating privileges, in order to increase the company's popularity, thereby affecting the rise and fall of the company's stock price, false reporting of various company reports, and covering up the company's actual situation Operating conditions and profit and loss conditions in order to achieve the purpose of manipulating stock prices; in the absence of actual transaction intentions, falsely report stock prices to deceive counterparties; Buy or sell these stocks on a large scale, and manipulate the price fluctuations of these stocks within a specific period of time. In order to maintain the market price of the company's stocks, the stock issuing company itself buys its own stocks in a monopoly manner, and waits for the company's stock price. When the market rises sharply, take corresponding countermeasures, and so on.Driven by gambling psychology, these speculators are willing to take risks to manipulate prices, have no moral standards at all, and are often complacent and self-righteous for their smooth stock market transactions.They are a bunch of real gamblers! However, as the saying goes, "those who play with fire must set themselves on fire", those who try to manipulate the stock price through illegal means try their best to profit temporarily, but they cannot escape the result of being ruined in the end.Please see the fate of "Mile Million": In February 1992, the Indian Central Bureau of Investigation checked Mehta's accounts through his personal computer in the name of investigating personal income tax payment. In April, the news that Mehta was involved in a financial scandal was first reported in Mumbai, and the stock market immediately began to fall. Although Mehta pretended to be calm, the continuous revelations by the news media attracted the attention of the government.The Central Bureau of Investigation and the Reserve Bank of India respectively set up special investigation committees.With the deepening of the investigation, the inside story of the scandal was gradually uncovered. People found that the banks involved in the case were not one or two, but dozens of banks, and the funds embezzled by Mehta were not hundreds of millions or billions, but entire banks. 30000000000.The whole country was in an uproar, demanding to find out the truth as soon as possible. In May, President Venkataraman signed a decree to freeze Mehta's assets, and the speed of the investigation also accelerated.The two investigative committees released their investigative reports separately. On May 27, Karad Bank, which was deeply involved in the scandal, was declared closed for liquidation. On June 4, five senior bank staff, including Maher and State Bank of India's deputy executive manager Hamani, were arrested and imprisoned. Mai million, who used to be invincible in the past, is now locked in a cell of 4 square meters. The cells next door were for habitual offenders and robbers. The fate of Mai Million shows that although there are many kinds of illegal speculators in the stock market, the international stock market is still booming, because countries generally attach importance to the effective management of the stock market.This is exactly: the French Open is restored, and it is not missed!