India infoline director arrested for fraud

Cops arrest top executive after MiD DAY highlighted several complaints of unauthorised transactions

Cops arrest top executive after MiD DAY highlighted several complaints of unauthorised transactions

"I never realised how dangerous it was to keep surplus funds in the broker's account," said Aarti Gunjikar (43) a housewife from Khar, who was allegedly duped by broking firm India Infoline to the tune of Rs 13 lakh.

On Wednesday, the Bandra police arrested Rajamani Venkatraman (42) co-promoter and executive director of India Infoline on charges of cheating and conspiracy. This is the third arrest in the case.

Gunjikar in her complaint had accused the company officials of allegedly conducting unauthorised trading in her demat account.

Interestingly, soon after Venkatraman was arrested, the company officials amicably settled the issue by giving her a demand draft of Rs 18 lakh (her sum of Rs 13 lakh and interest of Rs 5 lakh).

Gunjikar said, "My case is an example of rampant misuse of loopholes of the security market. Inspite of my written instructions to purchase blue chip shares on market correction, the surplus funds I had deposited in our (Gunjikar and her husband) demat account to purchase shares were misused without our knowledge to trade to the extent of Rs 59 crore just to generate brokerage (Rs 2.66 lakh) for the company.

Modus operandi

Elated: Dr Navneet Rastogi (right) with his father Babulal Rastogi who had accused India Infoline of trading in his demat account without his permission, welcomed the action against the firm, at their residence at Palam Colony, New Delhiu00a0file photo

According to Gunjikar, the modus operandi is simple. The firm pressurises the relationship manager to generate brokerage four times their salary or they will be sacked.

The company gets away with the crime as in most cases instructions given by investors are oral, and thus difficult to prove before a judicial forum.

She said, the article in MiD DAY (June 1), titled 'In the line of fire', had helped her to come across many victims, who were duped by the broking firm.

Dr Navneet Rastogi, a victim from Delhi, was happy with the arrest. "Not only me, India Infoline has carried out unauthorised transactions without the knowledge of many clients. The company officials do not even respond when we call to complain," said Rastogi.

India Infoline, in its statement, said that the allegations made against its executive director, are baseless, false andu00a0 on frivolous grounds with intent to extort money.

Senior Inspector Prakash George said, "We have registered the offence against all the people named in the complaint under section 409, 420, 506 and 120 (b) of IPC and that the case was being probed from all angles."