On Friday, he was produced before the XI metropolitan magistrate at Saidapet and was remanded in judicial custody.
Pachamuthu is also the founder of IJK party, which contested 2016 assembly elections along with BJP in Tamil Nadu.
He was arrested under Sections 420 (cheating), 406 (criminal misappropriation of property entrusted to someone) and 34 (acts done by several persons in furtherance of common intention) of the IPC.
Recently, the Madras High Court rapped the police for not questioning Pachamuthu's suspected role in the admission scandal and threatened to transfer the probe to an external agency. This had prompted the police to interrogate him.
According to the complaints lodged with the police S Madhan of Vendhar Movies and a key person in IJK had collected crores of rupees from parents to secure admission in the medical college belonging to SRM group. A sum of Rs 75 crore was allegedly collected from the students.
However Madhan disappeared in May after a purportedly writing a note that the money collected from the parents have been given to the SRM Group.
More From This Section
Reacting to that Pachamuthu in a statement said he is not connected with Madhan as he was expelled from IJK party.
Meanwhile Madhan's family filed a habeas corpus petition in the Madras High Court, which threatened to transfer the investigation to some other independent agency.