Indian police arrest politician in huge fraud prob

Federal tax officials say Koda swindled nearly 650 million dollars during his time as mines minister and chief minister in Jharkhand.

Indian police Monday arrested a regional politician suspected of embezzling up to 650 million dollars during his five years in ministerial posts in an impoverished eastern state, officials said.

Madhu Koda was taken into custody in his constituency of Chaibasa, in the state of Jharkhand, on allegations of possessing wealth exceeding his known sources of income -- an offence carrying a prison term of up to seven years.

- Following the arrest, Koda has been taken to (Jharkhand state capital) Ranchi under high security - Chaibasa police chief Akhilesh Jha, who detained the politician, told AFP by telephone.

Later in the day, the 38-year-old Koda appeared in court and was ordered to spend 14 days in prison while authorities investigate, Jha said.

Koda's arrest came after he failed to present himself before authorities for questioning, police said. He was arrested after evading several summons issued by India's Enforcement Directorate, which probes economic crimes, police said.

Federal tax officials say Koda swindled nearly 650 million dollars during his time as mines minister and chief minister in Jharkhand, known for its mineral wealth, abject poverty and raging Maoist insurgency.

Tax authorities have made dozens of raids and say they have found cash and a paper trail allegedly showing Koda and his accomplices bought mines in Africa and invested in India, Thailand, Dubai, South Korea, Bhutan and elsewhere.

Koda, known for his lavish lifestyle with frequent foreign trips, worked his way up from being a labourer in an iron ore mine and entered politics, winning a state assembly seat in 2000.

He became rural engineering minister a year later, awarding contracts for roads and bridges. In 2003, he took over as mines minister and from 2006 was chief minister, but kept the mines portfolio.

He quit as chief minister in 2008 when he looked set to lose a confidence vote.

Now an independent member of parliament, Koda has denied any wrongdoing, saying he has been targeted because he was a member of a tribal community and came from a poor family.

- I am succeeding in life, which people cannot tolerate - he said last month.

India's ruling Congress party, which backed Koda's candidature as Jharkhand chief minister in 2006, disowned the politician following his arrest.

The law - should take its own course and this matter must be dealt with most severely - Indian Law Minister Veerappa Moily told reporters in New Delhi.

- Nobody can interfere in this (case) - he said.