A Central Bureau of Investigation team on Wednesday arrested V.K. Panda, the general manager of the Defence Ministry’s Ordnance Factory at Medak near Hyderabad, after he was summoned to the city as part of an investigation into irregularities in a deal for supply of battle tank parts. Four officials of two forgings companies, who too were summoned here, were arrested in connection with the scam. They are S. Shanavas, managing director of Steel and Industrial Forgings Ltd, (SIFL), Thrissur; A. Valsan, senior manager of SIFL; Muralidhar Bhagvat, former managing director of AMW-MGM Forgings in Mysore; and K.R. Mugilan, a manager in the same company.

The CBI had earlier sought the Defence Ministry’s permission to arraign Panda as an accused in the case. He had allegedly been in touch with defence consultant Subi Mally, who is believed to have facilitated an agreement between Panda and SIFL to award a contract to the forgings company. He allegedly accepted Rs.3 lakh as bribe for the deal.

Shanavas and Valsan had earlier been named second and third accused respectively in the case. The duo allegedly conspired with Subi Mally, the fourth accused, to manipulate deals between SIFL and the ordnance factories at Medak and another at Avadi.

They also allegedly received a part of the commission that Ms. Mally collected for her role in the deal. A portion of this sum had been recovered from Mr. Shanavas’ residence by the CBI in a search earlier.

Ms. Mally has already been arrested and interrogated by the CBI. CBI officials said the arrests on Wednesday were made on the basis of information given by Ms. Mally and other evidence.

Ms. Mally allegedly acted as a mediator between ordnance factories and forgings companies like SIFL and AMW-MGM.

The five arrested will be produced before the CBI special court in the city on Thursday.

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