The agency, which is trying to track the alleged kickbacks of Rs 360 crore from the deal, arrested Khaitan, a businessman and advocate, after searches were conducted at two of his premises in the national capital on Monday.

"Khaitan has been arrested under the provisions of the Prevention of Money Laundering Act (PMLA). He is required for further detailed interrogation in the case," ED sources said.

The agency, after searches, had seized jewellery worth Rs one crore and impounded some "important" financial documents from his premises.

This is the first big action by the ED in this case after it registered a criminal FIR in the deal in July this year against Khaitan, former IAF chief S P Tyagi and 19 others in the VVIP chopper deal to probe the alleged kickbacks of Rs 360 crore.

Khaitan was on the board of Chandigarh-based Aeromatrix which is allegedly a front company for the financial dealings of the chopper deal.

According to CBI and other agencies, they had detected that funds for the particular deal were allegedly routed through this firm and few others.

A reference to Khaitan was also reportedly made in the Italian prosecutor's report filed in a court in Italy.

Khiatan, however, has refuted all the allegations made against him.

He earlier been quizzed by the CBI in this case. The ED had registered a case in this deal under PMLA, taking cognisance of a more-than-a-year-old CBI FIR.

The supply of 12 VVIP helicopters from AgustaWestland came under the scanner after the Italian authorities alleged that bribe was paid by the company to clinch the deal.

The Italian prosecutor who carried out the preliminary inquiry alleged that CEO of Finmeccanica, the parent company of UK-based AgustaWestland, had used the services of middlemen to bribe Indian officials.

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