Roshan Baig, a former Congress minister in Karnataka, was on Sunday arrested by the CBI in connection with the Rs 4,000-crore IMA ponzi scam. He was produced in a court and sent to 14-day judicial custody.
Roshan Baig was summoned to the CBI office and based on "material evidence", he was arrested, the agency said.
The scam linked to a ponzi scheme run by the Bengaluru-headquartered IMA Group came to light in June 2019, when payments to investors in the company's schemes abruptly stopped. The founder, Mansoor Khan, later fled abroad, leaving thousands of investors in the lurch. He was arrested a month later.
While abroad, Mansoor Khan had released an audio message accusing Roshan Baig of taking Rs 400 crore from him and not returning it.
Roshan Baig had refuted the allegation, saying the statement was "frivolous, baseless and mischievous."
In 2019, he was expelled from the Congress for criticising the party's state leadership over its dismal performance in the general election.
The MLA had seen his name being dragged in the case as a fallout with his adversaries in the Congress, which was in power when the case was filed.
Roshan Baig was among the MLAs whose revolt led to the collapse of the JDS-Congress government. He was, however, not inducted into the BJP like others.
In June this year, reacting to violence in Karnataka, Roshan Baig had alleged that the Congress patronised "extreme radical" organisations for over a decade.
The Karnataka government, meanwhile, has started a scheme for the IMA investors to recover their money.
"We are inviting claim applications from the depositors of IMA. Applications can be submitted for a month starting November 25. Any claim application received after December 24 will not be acceptable. Applications can be submitted online, or people can submit their applications at Bangalore One or Karnataka One help centres," Harsh Gupta, Special Officer and Competent Authority in the IMA case, had said.
With inputs from PTI