India, Sept. 7 -- Odisha Police on Tuesday arrested Malla Vijay Prasad, a former MLA of Yuvajana Sramika Rythu Congress Party (YSR Congress) and chairman of Andhra Pradesh Education and Welfare Infrastructure Development Corporation, over his alleged involvement in a chit fund scam worth Rs.1,200 crore, officials said.

Officials of the Economic Offence Wing (EOW) of Odisha police said Welfare Building & Estates Pvt. Ltd. was essentially a chit fund company of which Malla was the managing director. He lured people with false promises of returning a high rate of interest on deposits under different schemes of the company and unauthorisedly collected at least Rs.1,200 crore from several investors before closing offices.

"The company initia...