New Delhi (PTI): The 10-year-old wheat scam, allegedly involving then top bureaucrats, took an important turn on Friday when the CBI arrested an Indian-born US citizen Nirajan Shah who opened bank accounts in Cayman Island where 2.5 million dollars in 'kickbacks' from Australia were deposited.

Shah was arrested from New Delhi Railway Station as he was came here from Mumbai in Rajdhani Express. He was the third person to be arrested in connection with the case.

The CBI had already arrested former Chairman-cum-Managing Director of State Trading Corporation (STC) S M Deewan and an alleged middleman H S Sardana.

The CBI had registered a case in 2001 against then Cabinet Secretary T S R Subramaniam, former Food Secretary B K Taimni and Dewan for allegedly exporting wheat from Australian Wheat Board (AWB) in 1998 when there was no requirement for the same.

Deewan and Sardana, who were arrested by the CBI on July eight, had told the interrogators that companies were floated in Cayman Islands and the Bahamas for laundering the commissions received from AWB with the active involvement of Los Angeles-based Shah, a CBI spokesman said in a release.

The spokesman claimed that the US citizen said during his interrogation that he had "actively colluded with the other accused persons in channelising commissions received from AWB for the contract awarded for selling wheat to India in 1998."

After his arrest, the CBI carried out searches at Shah's residence in Mumbai.