Bhubaneswar, May 31: Police today arrested chairman of ARSS Infrastructure Projects Limited, a leading construction company in the state, Subash Agarwal, 50, in connection with the firing on Ajay Kumar, joint general manager (projects) at Rail Vikas Nigam Limited (RVNL), yesterday.

The police said Agarwal had allegedly hatched a conspiracy against Kumar after the joint general manager had imposed a penalty on the construction company for irregularities in construction in the Sukinda-Angul rail line project.

Three motorcycle-borne goons had stopped Kumar's vehicle and shot at him yesterday.

However, the bullet missed Kumar and hit his Scorpio. The criminals had also threatened the official to quit his job and return to Bihar, his native state. Kumar has been working with the RVNL in Bhubaneswar for the past two-and-a-half years.

"He had imposed a fine of Rs 25 lakh on a Ghaziabad-based agency, which had sublet the work to ARSS Infrastructure Ltd.

On May 21, the official again imposed Rs 3.3 lakh fine on the company," said a police official.

Agarwal, therefore, was not happy with the way things went against him and had hold grudge against Kumar, the police said. He had even visited Kumar's office at Rail Vihar here in February and involved in a heated argument with him, during which, the firm boss threatened the official to leave Bhubaneswar or else he would be killed, the cop said.

"The entrepreneur then engaged three goons who shot at Kumar. We are trying to nab them," said deputy commissioner of police Satyabrata Bhoi.

The company, which was incorporated in 2000, is a growing construction firm in the country, focusing on construction of highways, buildings and rail projects. The company has completed 80 projects across the country with contract value of over Rs 700 crore.

Agarwal, a graduate in commerce from Berhampur University, is the founding member of the ARSS with an experience of 20 years in the execution of railway and road projects.

The group has business interests in real estate, steel and power and cement. The company has also executed many projects under the Pradhan Mantri Gramya Sadak Yojana and also projects of the central public works department and the state public works department.

Agarwal, however, denied the charges and said someone was trying to "frame" him. In February 2013, the entrepreneur was rescued from Vishakhapatnam less than 12 hours after being abducted at gunpoint from the city.