Sheikh Imran was removed as deputy mayor after a no-confidence motion.

Former Srinagar deputy mayor Sheikh Imran was arrested by the Anti-Corruption Bureau (ACB) today in a case related to the alleged misappropriation of crores of rupees from the Jammu and Kashmir Bank, officials said.

Sheikh Imran, who was removed as deputy mayor after a no-confidence motion was passed against him, was questioned in connection with illegal appropriation of subsidy given to his company for setting up of a Controlled Atmosphere (CA) store, they added.

"The ACB investigation has revealed that funds meant for construction of a CA store were diverted. Sheikh Imran has been taken into custody for further questioning," an ACB spokesperson said.

"Sheikh Imran's company Kehwa Group got a loan of Rs 138 crore with the JK Bank for a project, restructured for merely an amount of Rs 78 crore under a well knit conspiracy," an official said.

A joint inspection team of various experts and government officials carried out an inspection of the site and assessed the cost of the project to Rs 33 crore, the ACB spokesman said.

The subsidy component was calculated at Rs 16.50 crore -- 50 per cent of the estimated project cost (EPC) -- purportedly as per norms of the Horticulture Mission for North East and Himalayan (HMNEH) states, he said.

The proposal was approved by the empowered monitoring committee of the Mission for Integrated Development of Horticulture (MIDH), the spokesman said.

During the inquiry, it also came to light that the Kehwa Group has six more business units and Sheikh Imran raised varied loan facilities and overdrafts for these units, the ACB said

"The liabilities on account of loan accumulated to Rs 138 crore. Since, one of the company Kehwa Square had turned non-performing asset, Imran sought one-time settlement with the JK Bank authorities," the spokesman said.