Bhubaneswar, July 3: The crime branch today arrested Motilal Gauda, the suspended assistant director of factories, who has been accused of fabricating a gazette notification and siphoning off Rs 1 crore from various industrial houses in the state on the pretext of getting their employees' health check-ups done.

Special director general of police (DG), crime branch, B.K. Sharma said: "An FIR was lodged against Gauda on charges of forgery, cheating, criminal conspiracy and destroying evidence. He and his accomplices had conspired to fabricate the gazette notification financial loss to the state government."

He was arrested from Vizianagaram in Andhra Pradesh.

The crime branch had earlier received complaints of manipulating the computer records to destroy evidence by Gauda and his accomplices.

It had earlier arrested threepersons, including a middleman and two pathology unit owners.

Gauda, who was reportedly close to several senior BJD leaders, including panchayati raj minister Arun Sahoo, had been absconding after the high court rejected his anticipatory bail plea on June 24.

Gauda had moved the high court on June 13 seeking anticipatory bail. His photo, along with Sahu, BJD student's wing president Byomokesh Ray and other MLSA in the same frame, had given a shot in the arms of the Opposition to corner the government on the issue of "patronising criminals".

After Gauda absconded, there was a hue and cry over the issue in the state.

Excise and co-operation minister Damodar Rout had said: "The government machinery should be held responsible for Gauda's acts. Investigation is going on to ascertain whether he had received political patronage or not."

BJP leader Bijoy Mohapatra had said: "Abetment of crime is also punishable. Action should also be taken against those who had given him political patronage."

The BJP and Congress had organised rallies demanding the arrest of Sahoo. The crime branch swung into action as the issue snowballed into a major political controversy posing a threat to dent the image of chief minister Naveen Patnaik.

A four-member team was constituted under inspector general of police Arun Bothra to nab him.

Tracking his mobile phone, the economic offences wing of the crime branch today nabbed him from Vizianagaram.

The team returned to the crime branch headquarters in Cuttack this evening along with Gauda. Gauda will be forwarded to the court tomorrow morning.

What intrigues the investigators more is that while the state health department had declared Gauda absconding, he managed to work with the labour department till a case was lodged against him.

The anti-corruption wing of state police yesterday raided the house of Gauda and found moveable and immovable properties worth Rs 70 lakh.