A senior telecom official and his associate were arrested by the CBI in Orissa on Wednesday in connection with a disproportionate assets case, CBI sources said.

Abanindra Mohanty, general manager of Nagpur telecom district in Maharashtra, was arrested in the state capital, his associate Gautam Mishra, an assistant professor in a private engineering college, was taken into custody by CBI sleuths in Rourkela, they said.

Both Mohanty and Mishra refuted allegations against them and said truth would come out soon.

Mohanty was arrested earlier in 2008 while taking bribe when posted as GM, Kharagpur Telecom circle.

He had been suspended for one year and latter reinstated at Nagpur. The CBI was conducting investigation against Mohanty since 2009 and had searched his house earlier during which assets disproportionate to his known sources of income had been detected, the sources said.

After an interrogation at the CBI state headquarter here, Mohanty was arrested under provisions of Prevention of Corruption Act 1988. Mishra was arrested for allegedly handling and using Mohanty's black money in the engineering college, CBI sources said.

A senior CBI official said the investigation would show whether Mohanty had any role in the multi-crore telecom scam rocking the country.