The Enforcement Directorate (ED) arrested Punjab Chief Minister Charanjit Singh Channi's nephew, Bhupinder Singh 'Honey,' in a money laundering case late night on Thursday, 3 February.
He is likely to be produced before a special court in Mohali on Friday.
Honey was arrested by the ED from Jalandhar on Thursday following day-long questioning in an illegal sand mining case, news agency ANI has learnt.
"We have no objections with the law doing its work...," Punjab CM Channi said when asked about the arrest.
The development comes ahead of the Punjab Assembly elections on 20 February.
In January, the ED had said that it had seized Rs 8 crore during raids at several premises belonging to Honey.
The financial investigative agency had said that incriminating documents related to illegal sand mining operations and properties were also recovered during the raids, as per an ANI report.
Reacting to the raids, Channi had said last month that the move was meant to pressurise him ahead of the Assembly elections in the state, adding that "it is not good for democracy."
He had also insinuated that the raids were meant as a revenge on the part of the Bharatiya Janata Party (BJP)-led government for the alleged breach in Prime Minister Narendra Modi's security in Punjab.
'ED is BJP's Election Dept': Congress Leaders React
"15 days before the Punjab elections, the "political gimmicks" of the Modi government started again! BJP's "Election Deptt" - ED entered the fray," Congress leader Randeep Singh Surjewala said on Twitter, adding that the move was meant to punish the Punjab government for standing alongside farmers protesting against the Centre's laws.
Meanwhile, Aam Aadmi Party President Arvind Kejriwal, whose party is a top contender against the Congress in the upcoming Punjab Assembly polls, said "Will the people of Punjab want to make such a person as CM who has serious allegations of sand theft and taking bribe in transfer posting?"
"I've said that agencies are being misused. Government is using them to threaten people, to put pressure on Opposition leaders. This should not be allowed during elections," Congress leader Priyanka Gandhi maintained.
"This is the job of any investigating agency... why blame a political party for it?" former CM and Punjab Lok Congress leader Captain Amarinder Singh said, alluding to the Congress leaders' comments, ANI reported.
(With inputs from ANI)
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