New Delhi, Nov 10 (IANS): Sanjay Chaudhary, a close aide of jailed former Jharkhand chief minister Madhu Koda, was arrested in Dubai Wednesday on an Interpol red corner notice, the CBI said, adding it would initiate steps for his extradition.

"Chaudhary has been arrested in Dubai, as per information received from Interpol, UAE, on the basis of a red corner notice issued at the request of CBI," said an official statement issued by the Central Bureau of Investigation (CBI).

"Now we will initiate steps to extradite Choudhary," it added.

Chaudhary is accused of investing Koda's dubious funds by using his contacts in the alleged siphoning of public money.

"A chargesheet was filed against Chaudhary Nov 12, 2010 in the court of special judge, CBI, Ranchi under relevant sections of the Indian Penal Code and Prevention of Corruption Act," said the statement.

"In connivance with other accused, he extracted illegal gratification of Rs.13 crore from a Mumbai-based company for favouring it in the allotment of iron-ore mining lease in the district of West Singhbhum, Jharkhand," it added.

According to the investigative agency, Interpol India had issued the red corner notice Oct 14, 2011.

Other charges against Koda, Chaudhary and their associates include cheating, amassing assets beyond their known sources of income and misusing their official positions.

The cases have been lodged under different sections of the Prevention of Corruption Act.

Madhu Koda has been in jail since November 2009 in a Rs.4,000 crore money laundering scam.