The Mumbai police has arrested Rajamani Venkatraman (42) co-promoter and executive director of India Infoline, a well-reputed domestic stock brokerage firm, on charges of allegedly cheating Aarti Gunjikar (43), a housewife from Khar.

Aarti stated in her complain that, she had deposited Rs 13 lakh in her (Gunjikar and her husband) demat account to purchase shares. But the amount has been misused by the company’s director without her knowledge, to trade to the extent of Rs 59 crore just to generate brokerage (Rs 2.66 lakh) for the company.

However, on the other side India Infoline, quoted in its statement that allegations made against its executive director are completely baseless and false.

But reports suggest that soon after arrest of Venkatraman, 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).

In a separate release, India Infoline, has registered a growth of 4.32% in its consolidated net profit, which surged to Rs 51.67 crore for the first quarter ended June 30, 2009 against same period last fiscal.

The company had posted a net profit of Rs 49.53 crore in the same period ended June 2008.

Despite the strong rally, the scrip of the company today settled the day at Rs 132 on BSE, down 2% compared to its previous close ahead of negative news.