The Central Bureau of Investigation (CBI) on Monday night arrested Jagati Publications Private Limited (JPPL) vice-president, Vijay Sai Reddy, a close aide of YS Jaganmohan Reddy, in the illegal assets case against YSR Congress party chief.
The CBI officials were also searching the offices of Sakshi, the Telugu daily and television channel owned by the MP, in his presence.
CBI Joint Director VV Lakshminarayana confirmed that Vijay Sai Reddy was arrested after day long questioning at Dilkusha guest house here.
"We arrested him at 7pm and will produce him in the court tomorrow (Tuesday)," he said.
The CBI booked a case against him under seven sections of Indian Penal Code including those relating to cheating and abetment.
Vijay Sai Reddy, a close aide of Jaganmohan Reddy, is the second accused in the case.
This is the first arrest made in the case. As the auditor of the family of late chief minister YS Rajasekhara Reddy, Sai Reddy is believed to have all the information about their assets.
The CBI had registered a case against Jaganmohan Reddy and others in August last year following a direction from the Andhra Pradesh High Court.
The court direction came on petitions by state minister P Shankar Rao and leaders of Telugu Desam Party (TDP).
The petitioners alleged that the investors who invested in JPPL and other companies owned and promoted by the MP at very high premiums were doing so as a quid pro quo for the favours doled out by his father and the then chief minister, late YS Rajasekhara Reddy.