We all know the famous battle between Manu Manik and Harshad Mehta from SCAM1992, but Manu Manik had also locked horns with Mr. Dhirubhai Ambani back then.
He led a bear raid on the shares of Reliance Industries, shorting Reliance heavily, aiming to break the price. Some people assume Manu Manik started this in order to assert Dhirubhai’s hold on the stock market, while others believe that Reliance’s Treasury department had borrowed money from Manu Manek himself to make stock market investments. With this piece of information, Manu made his bear cartel believe that Reliance’s financial situation was vulnerable.
Goes without saying, the cartel started winning initially as the prices of Reliance fell. Then came, a strong counter-attack from Anand Jain, Dhirubhai’s key lieutenant.
They bought truckloads of shares of Reliance from various brokers & the markets. The share price started to rise, and panic was created among the bear cartel.
The bears thought they could buy time by paying interest charges and rolling over the positions. But as we know, when you short a stock, you technically borrow it from someone and sell it in the markets and when the lender asks for the shares back, you have to buy it from the markets and give it back to the lender, no matter what the price is.
The lenders to this bear cartel were associated with Anand Jain, and as expected they refused to let them roll over the positions, so the shorts had to go square off their positions and buy the shares which further rose the price of Reliance.
This particular instance made the LEGENDARY Manu Manek eat a humble pie.