The Enforcement Directorate (ED) on Monday arrested former Deputy Vice-President of Kotak Mahindra Bank, Pushpinder Singh, in connection with the alleged Rs 145-crore Municipal Corporation (MC), Panchkula, fraud case, describing him as the “mastermind” behind the embezzlement.Singh was arrested by the ED’s Chandigarh Zonal Unit under provisions of the Prevention of Money Laundering Act (PMLA) following an investigation into the large-scale siphoning of government funds from Panchkula MC accounts.A Special PMLA Court in Panchkula remanded Singh to nine-day ED custody till June 9.The money-laundering probe stems from an FIR registered by the Anti-Corruption Bureau (ACB), Panchkula, under provisions of the Bharatiya Nyaya Sanhita and the Prevention of Corruption Act, against unidentified officials of Kotak Mahindra Bank. The FIR alleged that Rs 145 crore belonging to the civic body was embezzled through a well-planned criminal conspiracy involving bank officials and others.According to the ED sources, investigations have uncovered a close nexus involving bank officials, municipal corporation employees and private individuals who allegedly worked together to divert public funds.The agency claimed that Dileep Kumar Raghav, then Customer Relationship Manager of Kotak Mahindra Bank, and Pushpinder Singh, then Deputy Vice-President, allegedly acted in collusion with Vikas Kaushik, former Senior Accounts Officer of Panchkula MC, to open two unauthorised bank accounts in the name of the municipal corporation using forged authorisation documents.The ED revealed that funds lying in the corporation’s genuine bank accounts were subsequently transferred to these unauthorised accounts through fake fund migration letters purportedly issued on behalf of the civic body.Investigators further found that the diverted funds were routed to several financiers, including Rajat Dahra, Swati Tomar, Kapil Kumar and Vinod Kumar. The ED claimed these individuals were operating under the directions and control of Pushpinder Singh.According to the federal agency, bank accounts belonging to Rajat Dahra and Swati Tomar, through which a substantial portion of the siphoned funds was allegedly channelled, were also controlled by Singh.The probe further revealed that money transferred to the financiers from the fake MC Panchkula accounts was subsequently routed back to Pushpinder Singh and his wife, Preeti Thakur. The funds were also allegedly diverted to real estate firms and other private individuals on Singh’s instructions.The ED said further probe is under way to trace the money trail and identify other beneficiaries of the alleged fraud.