The accused, Durga Prasad Mishra, Managing Director of Micro Finance Ltd (MFL), was arrested from Bhubaneswar, official sources said.

The agency alleged that the accused had floated 10 firms, including a television channel and, over a period of time, is alleged to have collected Rs 500 crore from the depositors.

He is named in an FIR filed by the agency after Supreme Court asked it to conduct the probe into the multi-crore Saradha scam and related Ponzi schemes in West Bengal and Odisha.

CBI had recently conducted searches at his residence during which the agency collected some important documents. Hundreds of depositors had gathered outside his residence on the day of the raid demanding action against Mishra.

MFL came on CBI's radar after the agency questioned one of its directors. Its depositor base is expected to run into thousands and the company had invested in housing, hospitality and the media.

The company, according to CBI, not only duped investors but also tried to use the state government to gain the trust of depositors despite not being in possession of any Reserve Bank of India (RBI) authorisation to run finance schemes.

Odisha police's economic offences wing had arrested Ajay Swain, a former private secretary to the Commissioner-cum- Secretary to the Panchayati Raj department, for allegedly issuing an endorsement letter to all District Collectors seeking favour for the company though he had no official authority to write one.

RBI had found that the firm was registered as a non- deposit taking non-banking financial company (NBFC) but was collecting deposits from the public using Swain's letter.

The letter mentioned that MFL was established as per RBI guidelines and made good business across the state even though some branches of the firm were closed down after the chit-fund scam surfaced.

The letter had requested the District Collectors to take steps to facilitate the smooth running of the firm saying it had a good reputation.

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