Bengaluru: The special investigation team (SIT) on Friday (July 5) arrested Bengaluru north division assistant commissioner LC Nagaraj in relation to the Rs 1,500-crore I Monetary Advisory (IMA) Ponzi scam.

He was arrested on charges of receiving Rs 4.5 crore bribe in return for a No Objection Certificate (NOC) to IMA Group founder Mohammad Mansoor Khan. He was trying to raise a bank loan.

Until recently, Nagaraj had openly claimed that he had made attempts to take action against Mansoor Khan by slapping notices against him. He has now been accused of misusing his official position and extorting money.

The officer also allegedly concealed facts about IMA and submitted a report to the state government in favour of the company.

Nagaraj was picked up from the Karnataka high court in the afternoon. He was appearing in a civil matter in the court when the SIT sleuths went to him and informed him that they wanted to question him.

He said that he had to attend court proceedings. The officials waited and once that was done he told them that he had to have lunch. The officials took him to the high court canteen and whisked him away after lunch.

Raids have been carried out in Nagaraj’s house. He might be produced before a magistrate today (July 6).

SIT officials also arrested Manjunath, an account who helped Nagaraj in transacting with Khan. He is a village accountant and has been remanded in police custody.

Nagaraj is the second senior government official to be arrested in relation to the IMA scam, after the Bengaluru Development Authority (BDA) executive engineer, PD Kumar Nayak. The BDA official was arrested was arrested for taking a bribe of Rs 4 crore from Mansoor Khan.