Haridas Mundhra

Haridas Mundhra (Hindi: हरिदास मूंदड़ा) was a Calcutta-based industrialist and stock speculator who was found guilty and imprisoned in the first big financial scandal of free India in the 1950s. The Mundhra scandal exposed the rifts between the then Prime Minister Jawaharlal Nehru and his son-in-law Feroze Gandhi, and also led to the resignation of India's then finance minister T. T. Krishnamachari.

Born into a trading family, Mundhra started life as a light-bulb salesman, and pyramided his holdings by "fast deals and stock juggling" into a Rs. 40 million (USD 10 million) empire. However, by the mid-50s, his business empire was unravelling, and he came to be known for his somewhat questionable ethics. In 1956, he was indicted by the for selling forged shares.

In 1957, Mundhra got the government-owned Life Insurance Corporation (LIC) to invest Rs. 12.4 million (about USD 3.2 million at the time) in the shares of six troubled companies belonging to Mundhra: Richardson Cruddas, Jessops & Company, Smith Stanistreet, Osler Lamps, Agnelo Brothers and British India Corporation. The investment was done under governmental pressure and bypassed the LIC's investment committee, which was informed of this decision only after the deal had gone through. In the event, LIC lost most of the money.

The irregularity was highlighted in 1958 by Feroze Gandhi of the Indian National Congress party, who represented the Rae Bareli seat in the Parliament of India. Jawaharlal Nehru was Prime Minister at the time, and Feroze was married to his daughter Indira Gandhi. Nehru, as the leader of the ruling Congress party, wished to have the LIC matter handled quietly since it might show the government in a poor light.

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