The CBI on Monday arrested the managing director of an Indo-Swiss supplier firm while enforcement directorate (ED) intensified its probe into alleged irregularities in the award of contracts worth over Rs.600 crore for Commonwealth Games overlays.

Sandeep Wadhwa, MD of Comfort Net which is a part of the Switzerland-based Nussli India consortium, was arrested by the CBI in connection with the scam, sources said.

The ED, meanwhile, has claimed to have tracked money trail in the overlays scam and filed a case under the Prevention of Money Laundering Act, official sources said.

The CBI action on Wadhwa came after the agency claimed to have got some evidence against Nussli India which was given contract of nearly Rs 140 crore for supplying tents, portable cabins, containers and other items for six venues.

The company signed a memorandum of understanding with a Canadian firm's Indian unit to supply steel-based modular fittings for Commonwealth Games venues, they said.

The CBI had earlier accused former director general V K Verma and other officials of organising committee of entering into a criminal conspiracy with Binu Nanu in awarding contracts for overlays for different venues of Commonwealth Games at exorbitant rates.

The agency has alleged that public servants abused their official position, cheated and caused undue losses to the government and corresponding gain to four companies and themselves. One of the companies made accused by the CBI was Nussli-India consortium.

The total value of the overlays contracts that are under the scanner is over Rs 600 crore.

Earlier this year, the CBI has carried out detailed searches on the official and residential premises of all four companies which were alleged beneficiaries of overlays contract given for the Commonwealth Games.

Besides Wadhwa, searches were conducted at the premises of Binu Nanu and Roopana Binu, director, GL Events and Meroform India Sebastin Brunet, director, G L Events and Vinay Mittal, director, Deepali Designs and Exhibits.

Deepali Designs bagged contract worth Rs 230 crore, D Art Furniture Systems-ESG Arena of UK were given contracts for providing overlays for over Rs 90 crore, Nussli India got a contract for over Rs 140 crore and Meroform-GL services had bagged a contract worth Rs 165 crore, official sources said.

The CBI had earlier arrested additional director general of CWG organising committee K U K Reddy and supplier Praveen Bakshi, former OC chairman Suresh Kalmadi's close aide Deorukhkar Shekhar and Binu Nanu in connection with overlays scam.