Alok Kumar, Additional Commissioner of Police (West-Bengaluru), is personally known to Pari Rajan, said to be the kingpin in the scam, and allegedly had telephonic conversations and meetings with him.
Rajan is already in police custody.
"Yes, he has been suspended in connection with illegal lottery scam," Chief Secretary Kaushik Mukherjee told PTI.
Admitting that he knew Rajan, Kumar had earlier today denied his involvement of any kind in the case and demanded a fair investigation.
"I knew him for past four years, but had contact with him only from last two years. I was not aware that he was involved in illegal lottery or any such illegal activities," Kumar told reporters here.
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"My only prayer is that the investigation should not be targeted only against me; ...I believe that a thorough and fair investigation will happen, and truth will come out," he added.
Kumar's comments come in the wake of reports that he is one among the several IPS officers named in the interim report submitted by the Criminal Investigation Department, which is probing the case, to the state government.
He alleged that according to his information, former Director General and Inspector General of Police Shankar Bidari was the one who introduced Kumar to the kingpin.
Rejecting Kumaraswamy's charge, Bidari said "He is making these allegations because of personal enmity against me."
Chief Minister Siddaramaiah who had held a meeting of senior police officials earlier this month, had ordered a CID probe into the alleged scam. He had also said that government would take strict action against those involved in the scam.