A Kerala lawmaker was arrested on Saturday for cheating people who invested in a gold scheme run by his jewellery group.

M.C. Kamaruddin, Indian Union Muslim League (IUML) lawmaker who represents Manjeshwar in Kasaragod, was arrested in four of the 115 cases booked against him.

Over 800 depositors had accused him of cheating them of Rs 150 crore. The remaining cases are in various stages of investigation.

The arrest came five hours after he was summoned for interrogation at the Kasaragod police headquarters.

A district court in Kasaragod remanded Kamaruddin to 14 days in judicial custody. He was booked under IPC Sections 420 (cheating) and 34 (common intent) and could be jailed for seven years if convicted.

Sources said police had summoned the firm’s managing director P.T. Pookoya Thangal, also an IUML leader from Kasaragod.

Kamaruddin had allegedly cheated depositors who invested in his Fashion Gold Jewellery that offered investment schemes.

After launching his gold business in 2013, Kamaruddin started the investment schemes for common people and allegedly mobilised depositors using his clout as an IUML leader.

A huge majority of the defrauded investors were sympathisers of the party with a significant presence in northern Kerala.

But the firm allegedly stopped payment of interests about a year ago. The company even shuttered its three outlets in Kasaragod and one in Kannur in January this year leading to a scramble by the investors to get their money back.

The company then issued cheques to many of the aggrieved investors. But the cheques carried false signature of the managing director.

The case had put the Congress-led United Democratic Front (UDF) on the defensive at a time when the ruling Left Democratic Front (LDF) was battling several fronts opened by a gold smuggling case.

An influential IUML leader, Kamaruddin, was elected to the Assembly in a bypoll held last year.

With a large number of complainants being IUML sympathisers, the party had stepped in about six weeks ago when Kamaruddin was told to clear all the dues in six months.

While the IUML even formed a committee in a last ditch attempt to make Kamaruddin pay the depositors, it had made it clear that only the lawmaker was responsible for his woes.

But Kamaruddin allegedly liquidated all the assets leaving no chance for any repayment. He allegedly invested in real estate ignoring the solution suggested by his party.

Kamaruddin termed the arrest as “politically motivated” and said he was working on clearing the dues to his depositors.

“The government is covering up its own issues… this is politically motivated,” he said while being taken for the mandatory medical tests at the Kasaragod general hospital.

The arrest came as a blow to the party, which is the second-largest constituent of the UDF that was aiming to do well in the local body polls scheduled in December.

Congress leaders, however, sought to downplay the arrest and maintained that law would take its course.

“The Congress only wants to say let law take its course,” state Congress president Mullapally Ramachandran told reporters after the arrest.

UDF convener M.M. Hassan echoed Ramachandran’s view but questioned the timing of the arrest.

“The timing of the arrest has a political motive,” he said alluding to how the LDF government has been on the defensive ever since the gold bust on July 5.

The gold case had led to sustained interrogation and later arrest of M. Sivasankar.

Although the government was quick to suspend him after his links with some of the key accused in the gold smuggling case became clear, his recent arrest in a money-laundering case had put the LDF under pressure.

CPM state secretary Kodiyeri Balakrishnan’s son Bineesh was also arrested in Bangalore over a money-laundering case linked to a drug racket, which had put the ruling party on the back foot.