Pai on the charge of causing loss of over Rs 290 crore to two banks through fraud.
The accused persons were arrested in Kolkata late on Monday night after day long questioning, an agency official said.
The CBI said its probe revealed a large-scale scam in which 13 companies of Kolkata and Nagpur-based Abhijeet Group, now Pathbreaking Projects Ltd, raised loans from over 20 banks and other financial institutions, which turned into non-performing assets (NPAs) since 2014 and led to outstanding loans of Rs 11,376.77 crore.
The arrests were made in a case registered by the agency on September 29, 2015 on a complaint by the two public sector banks that the accused perpetrated a fraud of Rs 290.77 crore through criminal conspiracy and cheating.
The CBI investigation revealed that Jayaswal along with his son Abhishek conspired with Canara Bank's Pai and others to cheat the two banks while executing an Engineering Procurement Construction contract to set up of a coal-based power project at Bihar's Banka on behalf of another private infrastructure and power company based at Kolkata.
"The Kolkata-based company was allegedly awarded the civil and structural work of the EPC contract by executing the contract agreement without the knowledge of the banks," the official said.
As per the banks' contract, the Kolkata-based company was required to refund the mobilisation advance of Rs 157.9 crore in five instalments on demand while the Bihar-based project had to give bank guarantee of the like amount to the firm in Kolkata, he said.
"Both the companies diverted the bank loan for other purposes than for which it was sanctioned."
The official said that Canara Bank official recommended and forwarded credit proposals to the competent authorities of the bank by falsely confirming about assignment of bank guarantees worth Rs 157.9 crore given by these firms.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)