Hyderabad, Jan. 10: Police arrested Srinivas Vadlamani, chief financial officer of scandal-wracked Satyam Computer Services, tonight just hours after a court remanded former chairman B. Ramalinga Raju and his brother Rama Raju in judicial custody till January 23 in connection with the country’s biggest corporate fraud.

Srinivas was arrested after he was picked up earlier in the day by state CID officials and taken to the police headquarters for questioning. He is likely to be produced before a magistrate tomorrow.

The Raju brothers were taken to a magistrate’s home in west Maredpally in Secunderabad amid tight security and were handed a 14-day remand. They will be lodged at the undertrials’ prison in Chanchalguda that once housed Monica Bedi.

Raju’s lawyers said they would move an application for bail on Monday. The 54-year-old disgraced corporate chieftain is a diabetic and suffers from hypertension. He was taken to a city nursing home for a medial check-up in the morning after he complained of chest pain.

A team of Sebi officials met Raju briefly and asked him to authenticate some of the documents they had seized from Satyam’s corporate office. Sebi’s lawyers also intend to move court on Monday to record Raju’s statement. One of the legal infirmities in Raju’s confession was the fact that it was sent through an email that didn’t bear his signature.

In Delhi, Prime Minister Manmohan Singh conferred with Premchand Gupta, minister for corporate affairs, and top finance ministry officials to find a way to deal with a crisis that has snowballed since Raju confessed he had been padding profits and fudging Satyam’s accounts for years.

Reports swirled that Singh had also consulted home minister P. Chidambaram and deputy chairman of the Planning Commission Montek Singh Ahluwalia but the spokesperson for the Prime Minister’s Office refused to confirm this.

Sebi chairman C.B. Bhave also met Gupta to apprise him of the measures that the capital regulator had taken to deal with the crisis and stem investor rage over the fraud.

The Company Law Board (CLB), which ordered the supersession of the Satyam board of directors on an application made by the Centre, said at a hearing today that the new board of 10 government nominees would have to submit periodical reports on Satyam’s affairs to the Centre and the CLB.

The government’s petition to the CLB has also named Pricewaterhouse, the audit firm which certified Satyam’s accounts, the company secretary and all the directors on the board, including those who resigned last month — Vinod Dham, M. Rammohan Rao, Krishna G. Palepu and Mangalam Srinivas. The CLB has asked all the respondents to file their replies to the petition by February 20.

The CLB asked Satyam’s interim management to handle day-to-day operations till the new board took over.

Even as confabulations continued on the composition of the new Satyam board, the UK-based Lazard Asset Management demanded a board position on the ground that it had become the largest shareholder in Satyam with a just over 7 per cent stake.

Lazard apparently scooped up a lot of the pledged shares that lenders to the Rajus had been selling in the past two weeks. “I have seen a letter from Lazard. The ministry is looking into it,” Gupta said.

The Andhra government has also pitched for three board positions. The board is likely to be constituted early next week.

The Institute of Chartered Accountants of India served a showcause notice on Pricewaterhouse asking it to submit the balance sheets of Satyam for the past five years. The auditor has been given 21 days to reply to the notice.