Sources said B Nagendra's wife Manjula was taken into custody from her residence located in the upscale Dollars Colony in Bengaluru.
It is alleged that money has been also transferred from the account of B Nagendra, who is in custody, to his family members and also to his wife's account.
The opposition has been demanding the resignation of Chief Minister Siddaramaiah and is also demanding a probe by CBI in the case.
They have alleged that the case involves Rs 187 crore which has been fraudulently transferred to fake accounts in Telangana and used during the Lok Sabha election.
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