Jagati Publications is owned by the YSR Congress chief and publishes Sakshi Telugu daily and runs a news channel. The CBI is probing the case after the Andhra Pradesh High Court ordered an inquiry on August 11 last year.

The CBI questioned Vijay Sai Reddy on Monday morning at the Dilkusha guest house, the field office of the agency, and arrested him in the evening. He is the accused number two in the case.

Vijay Sai Reddy had been an auditor for the YSR family for almost three decades starting with Sandur Power Company Ltd owned by Jaganmohan. He had resigned in December 2005 and had been appointed as director of the company in which position he continued till December 2006. When Jagati Publications was launched, he joined as the vice-president.

The CBI had interrogated him several times and his petitions against the probe were dismissed by both the HC and the Supreme Court.

The CBI is understood to have arrested him under the Prevention of Corruption Act section 13, clause 4. The other sections under which he was charged include section 120 (B), 409, 477 and 477 (A). It is believed that at least under seven sections the case is registered by the CBI.