It has also frozen bank deposits worth Rs 20 crore in different accounts in the country as part of the operation.
The Enforcement Directorate had conducted nation-wide raids on April 1 in 16 states with sleuths swooping down at market places, business centres, residential premises and even houses put up on rent to hunt down allegedly dubious and suspicious firms which the agency believes are the "backbone" of black money in the country.
The agency said Mr Reddy is an engineering graduate in industrial production in Bengaluru and "had masterminded floating of more than 20 shell companies, obtained loan by dubious means and defrauded the United Bank of India and other banks to the tune of more than Rs 70 crore by submitting forged/fake documents and also by impersonating".
It said there are three PMLA cases registered against Mr Reddy, a "wilful defaulter" of loans, who had allegedly floated shell firms in India and Dubai.
He has now been sent to two days of Enforcement Directorate custody by a special court.
In the second case in Chennai, Mr Ali was arrested for "remitting foreign exchange through shell companies using fake documents".
He was involved in cheating the Indian Bank in Chennai using eight shell companies and remitted $11,778,120 (about Rs 78 crore) out of India against a forged bill of entries without affecting any actual imports, it said.
"On the basis of the alert triggered by the Indian Bank, the Chennai Customs through their in-house verification confirmed the fabrication of the bills of entry and referred the matter to ED for detailed investigation following which an FIR was also registered by the Chennai City Police and action under PMLA was also initiated," it said.
The Enforcement Directorate said Mr Ali had made outward remittances of over Rs 18 crore "without any actual imports into India, causing depletion of precious foreign exchange to the country".
Mr Ali has now been sent to the Central Jail in Puzhal in Chennai after he was produced before a special court.
On April 1, Enforcement Directorate teams had visited at least 110 locations in cities like Kolkata, Mumbai, Ahmedabad, Panaji, Kochi, Bengaluru, Hyderabad, Delhi, Lucknow, Patna, Jaipur, Chandigarh, Jalandhar, Srinagar and Indore, besides some in Haryana.
The drive was part of a recent directive by the Prime Minister's Office to check the illegal operations of these companies.
Shell companies are firms set up with nominal paid-up capital, high reserves and surplus on account of receipt of high share premium, investment in unlisted companies and no dividend income or high amount of cash-in-hand.
Such firms also characteristically have private companies as majority shareholders, low turnover and operating income, nominal expenses, nominal statutory payments and stock in trade and minimum fixed assets.
The agency said further probe in these cases is "in progress".