Scam in Mumbai: 72-year-old duped of Rs 35 crore loss by brokerage firm over four years

A major financial fraud has come to light in Mumbai, where a 72-year-old businessman, Bharat Harakchand Shah, was tricked into losing around Rs 35 crore by a brokerage firm, Globe Capital Market Limited. The company manipulated Shah and his wife into unauthorised trading, using their accounts over a span of four years.

What happened?

Shah, who runs a budget guest house for cancer patients in Parel, inherited a stock portfolio after his father’s death in 1984. Though the couple wasn’t actively involved in trading due to a lack of stock market knowledge, they decided to open a Demat and trading account with Globe Capital Markets in 2020, following a friend's recommendation.

At first, the firm’s dealings seemed legitimate. The company reassured Shah that no further investment was needed and offered to use his shares as collateral for trades. Representatives from the firm, including two employees, Akshay Baria and Karan Siroya, were assigned to manage Shah’s portfolio. They started by providing guidance through phone calls and home visits, gradually gaining full control over the accounts.

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The fraud unfolds

The company’s representatives took complete control of Shah’s accounts, guiding him to place trades and even handling the technical aspects themselves. Shah, trusting the firm, complied with their instructions, entering one-time passwords (OTPs) and responding to emails and SMS without suspicion. As a result, while he received annual statements showing "profits," the reality was starkly different. Unbeknownst to him, massive trading activities had occurred on his account, leading to significant losses.

Revelation of the scam

The truth emerged in July 2024 when Shah was informed by Globe Capital's Risk Management Department that his accounts were in debt to the tune of Rs 35 crore. The company threatened to sell his shares unless the amount was paid immediately. When Shah visited the firm, he learned that unauthorised trading had taken place, with his shares being sold and the account pushed into loss through manipulated, circular trades.

Facing a dire situation, Shah sold his remaining shares to clear the debt and transferred the remaining assets to another firm. It was only after reviewing his full trading history on the Globe Capital website that Shah discovered the discrepancies between the profit statements he had received and the actual trading activities. He also found out that the brokerage firm had responded to multiple notices from the NSE on his behalf, without his knowledge.

Legal action

The full scale of the fraud was revealed, with Shah describing it as a well-organized financial scam. He filed a First Information Report (FIR) at the Vanrai police station, accusing the firm of criminal breach of trust and cheating under Indian Penal Code sections 409 and 420. The Mumbai Police's Economic Offences Wing (EOW) has now taken over the investigation into the matter. This case highlights the risks associated with unauthorized trading and the importance of vigilance when dealing with financial institutions, especially for individuals with limited stock market knowledge.