Bhubaneswar, Nov 7 (IANS): Police Thursday arrested the director of a private fund management company in Odisha in connection with a multi-crore-rupee chit fund scam, an official said.

Rajesh Kumar Sahu, the 40-year-old director of Innovatives Fund Management Ltd., was arrested here in the state capital following complaints that his company received deposits from investors assuring them high returns but did not keep its promises.

"We arrested him on the basis of complaints lodged by three local investors. They alleged that the company collected a total of Rs.49 lakh from them promising a yearly interest of about 24 percent," Inspector-in-charge of the city's Mancheswar police station Bharat Sahu told IANS.

Prasant Kumar Das, the company's chairman, was earlier arrested on similar charges about three months ago, Sahu said.

Das is also the head of the Innovatives Group, which is involved in several businesses like fund management, homes and infrastructure, agriculture and beverage and hotel industry.

The alleged chit fund scam came to light last year after investors complained they were cheated. Police and the economic offences wing (EOW) of the Odisha Police Crime Branch are investigating the allegations.

Police raided offices of several such companies and arrested many people. The government appointed a one-man judicial commission led by retired Sikkim High Court chief justice R.K. Patra. The commission has already received about 10 lakh complaints.

Other companies accused of duping people include the Kolkata-based Saradha Group and Odisha-based Seashore and Artha Tatwa groups.

The state government announced in July it would create a corpus fund of Rs.300 crore to help the duped investors. However, it is yet to begin the process.