Indian police Monday arrested the disgraced former chief minister of the eastern state of Jharkhand, Madhu Koda, for his alleged involvement in the country' s biggest ever political scandal -- a multi-million money laundering scam.

"We have reached at a stage when his arrest was necessary. We had taken the arrest warrant from the competent court," Inspector General of Police (Vigilance) M.V. Rao told the media in state capital Ranchi.

The arrest, from the Chaibasa district of the state, came two months after a case under the Prevention of Money Laundering Act was lodged against the 38-year-old laborer-turned-chief minister for money pilfering, diversion of state assets and even offshore investing without legal sanction.

According to Indian investigators, Koda's empire stretches from Mumbai to Africa -- from luxury hotels and three companies in Mumbai to a hotel in Thailand and a coalmine each in South Africa and Liberia, his illegal foreign-exchange transactions and assets are allegedly worth more than 40 billion rupee (800 million U.S. dollars).

Investigators have also revealed that the major part of the illegal investment was made when Koda was Jharkhand's chief minister from Sept. 2006 to Aug. 2008.

During the probe, details of transfer of at least 5.5 billion rupees (110 million U.S. dollars) to a frontman in Dubai for overseas investments has also come to light.

Koda and his associates used Indian financial capital Mumbai to stash away the ill-gotten wealth to United Arab Emirates, Malaysia, Indonesia, Thailand, through illegal foreign-exchange transfers channel, the investigators have claimed.

"Law will now take its own course. We are determined that he's punished if proved guilty," a senior police official said.

Koda was arrested after he did not respond to the second notice issued against him to participate in an investigation related to a money laundering scam. He will be first taken to Ranchi and then he is likely to be taken to Delhi.

There are two investigating agencies who were involved with the case Income Tax Department and the Enforcement Directorate (ED).

The fresh summons were issued to Koda on Friday evening for questioning related to assets allegedly amassed by him beyond his known sources of income.

According to sources, Koda told the Vigilance Bureau he was busy in election campaigning and would appear before it after the five-phased Jharkhand assembly polls end on Dec. 18.

The state Vigilance Department in August filed a case against Koda and three former ministers -- Bandhu Tirkey, Bhanu Pratap Shahi and Kamlesh Singh -- for graft.

The houses of the four were searched by the vigilance department in September and cash and documents detailing huge amounts of investments and land purchases were allegedly seized. A country-made revolver was also recovered from Tirkey's house.

Koda also failed to appear before the Enforcement Directorate on the three dates -- Nov. 11, 15, and 19 -- he was summoned.