Gurunath Meiyappan, a top official of the Chennai Super Kings franchise and son-in-law of the BCCI president N Srinivasan, has been formally arrested by Mumbai Police on charges of cheating, forgery and fraud. The development, late on Friday night, is the most serious setback to the IPL in its six-year history and has serious implications for the BCCI as well given the names involved.

As of early Saturday morning there was no news of an emergency BCCI meeting but it is expected that events will move fast through the day, to discuss the issue of leadership - though Srinivasan insisted he would not step down - and also Chennai Super Kings' participation in the IPL final on Sunday.

Gurunath had been summoned to Mumbai for questioning over betting and links to bookies and flew in on Friday evening.

"We have interrogated Mr Gurunath after he arrived here at the crime branch headquarters," Himanshu Roy, the joint commissioner of Mumbai Police, said. "We have gone through questioning with him in detail and after due deliberation, we have arrived at the conclusion there is evidence of involvement in offence we are investigating and therefore he has been placed under arrest. He will be produced in court within 24 hours as per law."

Reports suggest Gurunath's interrogation in Mumbai will continue through Friday night, and he will also be confronted with Virender "Vindoo" Dara Singh, the actor arrested earlier this week for alleged contact with bookies. Police investigations suggested that Vindoo and Gurunath were in frequent telephonic contact. Vindoo was also seen in the CSK box at IPL matches.

Gurunath's lawyer PS Raman said: "We are exploring all legal possibilities. We are waiting for the remand report before reading the charges against him."

Srinivasan had not commented in public since the reports first emerged on Wednesday that his son-in-law was linked to the IPL scandal, but after the arrest he maintained he would not resign as BCCI president. "I have done nothing wrong," he told NDTV. "I am not resigning, the board is largely supportive of me."

Gurunath's connection to Super Kings was the subject of dispute through the day. He was the public face of the franchise, his Twitter handle said he was the "team principal", he was seen as Super Kings' representative at auctions and at IPL owners' meetings. Yet on Friday evening India Cements, the owners of the franchise and of which Srinivasan is the managing director, said Gurunath was only an honorary member of the team management.

The implications of Gurunath's arrest involve both Super Kings, who have qualified for the final to be played on May 26, and Srinivasan.

His arrest brings into question Super Kings' participation in the final - under IPL rules, the BCCI-IPL can terminate a franchise agreement "with immediate effect if: c) The Franchise, any Franchise Group Company and/ or any owner acts in any way which has a material adverse effect upon the reputation or standing of the League, BCCI-IPL, BCCI, the Franchise, the team (or any other team in the League) and/ or the game of cricket."

More importantly, and with wider implication, Srinivasan's position within the BCCI is likely to be under serious threat - not only because Meiyappan happens to be his son-in-law but because Srinivasan heads India Cements, who are owners of the Super Kings. The conflict of interest that arises from Srinivasan's dual position as BCCI president and de facto owner of an IPL franchise now has a serious immediate implication: he will, as board president, have to oversee any disciplinary action against either Gurunath or the franchise.

An IPL insider clarified that Meiyappan's change of designation was not likely to have any impact on the action that needs to be taken. "The moment you're a team management member, irrespective of the designation, the Anti-Corruption code applies to you. And nobody can deny the fact that he is a part of the ownership group and team management."

Jayaditya Gupta

Over the past week the image of Indian cricket has taken a fearsome battering. It started with the arrest of three cricketers on allegations of spot-fixing and continued as various bookmakers and bit players who flock to the sport were also arrested and details of their "confessions" were leaked. Through it all N Srinivasan, the BCCI president, maintained that there were a few "rotten eggs" in Indian cricket, and the game was in overall rude health. On Friday night his assertions came crashing down with the arrest of his son-in-law Gurunath Meiyappan, the de facto head of the Chennai Super Kings franchise.

Gurunath's arrest - and it is safe to say the Mumbai Police would not have taken that step, given the implications, without very strong evidence - is a far more serious issue than the arrest of three players. As the "team principal" - the style on his Twitter handle - he sat in on player auctions, attended IPL meetings as his franchise's representative and had free access to the players at most times. He is, without much doubt, the team's most important person - his players referred to him as "boss". Under the IPL's rules, therefore, his arrest leaves Super Kings' franchise agreement liable to be terminated with immediate effect. Where that leaves the team, which has qualified for Sunday's IPL final, is still anyone's guess.

Any decision on Gurunath will have to be taken by the IPL and the BCCI, which begs this question: how can Srinivasan, father-in-law of the man arrested and managing director of the company that owns the franchise, also be at the head of the organisation that will decide on the punishment? Srinivasan has so long played the conflict-of-interest game to his advantage, watching his Super Kings team become the most successful IPL franchise. The time has now come for him to step down, if only to enable a free and fair inquiry and to allow Indian cricket and its governing body the opportunity to retrieve some of the ground it has lost. Srinivasan has long called himself a cricket fan. To use a cricketing analogy, he needs to walk before he is given out.