The detective wing of Barrackpore police commissionerate has arrested BJP MP Arjun Singh’s nephew Sanjith Singh, alias Pappu Singh, for allegedly swindling Rs 11.6 crore that was disbursed as loan to contractors by the Bhatpara-Naihati Cooperative Bank Limited.

The alleged fraud at the cooperative bank headed by Arjun Singh in 2018 was committed on the basis of fake work orders of Bhatpara municipality, said the investigators.

The sleuths said the fund disbursed to the contractors had eventually been transferred to Pappu’s account.

The BJP MP was also the chairman of the Bhatpara municipality that allegedly issued the work orders.

Pappu appeared before an investigating team on Friday afternoon for the first time after he had ignored at least four summonses related to the case. He was arrested after interrogation, said an officer of the detective wing. He will be produced in a court in Barrackpore on Saturday.

“During the investigation, we have found that the loan disbursed to about 29 contractors was finally transferred to the account of a company that is owned by Pappu who had not been issued any work order or sought a loan from the bank.”

After the probe began on the basis of a complaint lodged by Trinamul Congress leader Somnath Shyam, the accused have returned only about Rs 5 crore.

Sources said Shyam had lodged a complaint at the Bhatpara police station in February, accusing the bank authorities of disbursing loans to several contractors based on forged documents during the 2017-18 fiscal.

Neither have the contractors refunded the borrowed amount, nor have they executed any work.