The central crime station police in Hyderabad arrested N Keshava Reddy, director of Keshava Reddy Educational Institutions, late on Wednesday night for allegedly cheating hundreds of depositors.

Reddy, who runs the well known chain of educational institutions spread over many cities in Andhra Pradesh and Telangana, allegedly collected Rs 470 crore as deposits from parents and individuals promising high returns.

According to a Times of India report, Reddy would collect amounts above Rs one lakh from the parents, when their children joined the school, and promised that the deposits, would be refunded after the students completed their schooling, with interest.

Reddy is estimated to have amassed at least Rs 470 crore this way, the police said.

The arrest also came to the notice of the state government and state HRD minister Ganta Srinivasa Rao, who ordered a probe into the deposit scam.

Cases have also been booked against Keshava Reddy in Nandyal and Panyam police stations in Kurnool, under Sections 420, 403 and 109 of the Indian Penal Code.

Keshava Reddy, however, maintained that he would not default on his commitment and he had no intention of cheating the depositors.