In India, litigation goes on forever. And, even when the main accused is no more, other enablers, collaborators and foot soldiers remain entangled in the slow grind of the legal system for decades.
On 7th May, a judgement by a special SEBI (Securities and Exchange Board of India) court in Mumbai related to Harshad Mehta, the ‘Big Bull’ operator of the 1990s, brought home the travesty of our legal system.
The specific charge in this case was narrow and seems strangely trivial. Dinesh Doshi and Anil Doshi, along with six companies they controlled (Starshare Investments & Finanz, Ikshu Finvest, KRN Finvest & Leasing, Esquire International, Money Television and Industries Ltd and CDP Fincap & Leasing) were convicted for failing to comply with multiple summons issued by the market regulator SEBI, almost 30 years ago, way back in 1998.
In six separate orders, the court imposed a cumulative fine of ₹1.80 crore on the accused. The court also warned the directors of one month’s simple imprisonment in default of payment.
This is not the first strike. In June 2025, the same special court had already convicted Rijuta Finvest and the Doshi brothers in a parallel case from the identical 1998 probe, imposing smaller fines of ₹2 lakh each.
The companies indicted were part of the so-called ‘Damayanti Group’, a web of front entities used by Harshad Mehta allegedly to ramp up the shares of BPL, Videocon International and Sterlite Industries, in a comeback attempt. Harshad Mehta passed away in 2001, while the trial against two other directors—Vinod Shah and Dilip Shah—ended with their demise.
The answer to why the directors stonewalled SEBI’s summons and call for documents for such a long time perhaps lies in the story of how the investigation into the Damayanti Group progressed and then unravelled at the appellate level. Barely five years after joint parliamentary committee (JPC) and a multi-agency investigation identified him as the central figure of the 1992 securities scam, Harshad Mehta, while out on bail, attempted an audacious comeback as a new-age stock market guru, supported by media houses and editors.
He used the same pre-1992 copybook to ramp up stocks of BPL, Videocon and Sterlite, using the Damayanti Group as the vehicle for his operations. A relentless ramp up of shares, collapsed when the market slumped in the aftermath of the sanctions against India in 1998, after the India’s nuclear tests in Pokhran.
A bigger scandal erupted when directors of the Bombay Stock Exchange (BSE) colluded in a brazen cover up to avoid another scandal. They illegally opened its computerised trading system at midnight, to insert synchronised trades to bail out brokers who were trapped by the fall in stock prices. A SEBI investigation showed that the bailout itself was funded by the very corporate groups whose shares had been ramped up.
In fact, SEBI conducted what appeared to be an exhaustive investigation between 1998 and 2001. It traced fund flows of ₹10 crore-₹15 crore through group entities, telephone records, travel bills, lawyer fees, broker mandates, bail-out payments and handwritten notes linking Damayanti fronts directly to the promoters of BPL, Sterlite and Videocon.
Yet, the entire set of landmark orders banning Sterlite for two years, Videocon for three and BPL for four was comprehensively thrown out by the securities appellate tribunal (SAT) between October 2001 and June 2002. SAT ruled that SEBI had produced ‘insufficient material evidence’ of direct or even circumstantial promoter complicity. In effect, SEBI’s detailed circumstantial groundwork was undermined by procedural gaps such as limited cross-examination of entities and failure to nail corporate control or intent — gaps that a powerful battery of lawyers exploited to the hilt.
In April 2001, SEBI barred Harshad for life. He appealed the order but passed away soon after. The SEBI court order notes that the companies claimed they were victims of Harshad Mehta's misconduct. They argued that Mehta, who was married to a sister of the accused directors, operated through these ‘fictional’ companies without the directors' actual consent or knowledge’.
The fact that SAT found SEBI’s evidence ‘insufficient’ perhaps gave the Damayanti directors a plausible legal shield or incentive to claim that the shell companies were operated solely by Mehta. It is hardly surprising then that the Damayanti entities and their directors initially ignored SEBI summons and later failed to produce records.
In the circumstances, the 2026 conviction on the narrow non-compliance charge seems fairly pointless; but it is still unclear if this closes the chapter on the 1998 comeback and the Damayanti Group. Let’s not forget that the special court constituted under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992, is still active as of May 2026. Although the main trials ended around 2018, the court continues to function primarily for miscellaneous applications concerning the custodian’s management of attached assets, notifications, recoveries and related proceedings.
Meanwhile, Videocon, which grew into a consumer-electronics, oil-and- gas behemoth collapsed into one of India’s largest insolvency cases with a group default of over ₹61,700 crore in 2017-18. Sterlite Industries folded into Vedanta and has continued to grow relentlessly in the face of ongoing controversies over environmental and governance issues. A barrage of exposés by short-seller Viceroy Research in late-2025 and early-2026 laid bare alleged financial engineering and unsustainable debt flows between Vedanta Resources Ltd and its Indian subsidiaries. BPL Ltd, once a top electronics brand, now has patchy financials and is fighting an insolvency application.
All this only underscores the fact that in India’s slow legal process, nothing is ever closed and collateral damage can linger for decades, leading to a fresh reckoning. This can happen even while the capital market itself has transformed dramatically and the regulator is now armed with better surveillance tools and expanded powers, with an amended SEBI Act giving it a wider remit over commodities trading.
And yet, the Damayanti case is a reminder that regulatory muscle is only as effective as the speed and finality of its justice. This means that there is also no guarantee that its more recent, high-profile investigation, like the one that accused Jane Street, a top US-based proprietary trading powerhouse (which is still at the interim-stage (Tough Regulator, Weak Market: Jane Street Saga Exposes a Deeper Problem) since July 2025, will lead to a watertight order that holds up under appeal. In this case, the world is watching what happens!
This tells you everything you need to know about our colonial judicial system that we blindly thrust our faith on, just like the flawed constitution. Our mindset is archaic and medieval, and we don't seem to have a problem with it. And this is precisely what ails our country. We put our atrocious judicial system (and its inherent) and the constitution on a pedestal without even thinking twice how messed up both are. It's time for a complete rewrite and completely new identity. Merely changing the laws and adding one addendum after another doesn't solve anything (so called band-aids). Every time we address a problem (and solve it) another tentacle regrows manifesting itself in a different avatar. This is a feature of our system, not a bug. Endless whack-a-mole without addressing the elephant in the room (outdated constitution that needs a rewrite from scratch and a complete dismantling and overhaul of the judiciary in all its form, including "regulatory bodies").
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