The official, K Purushotham Reddy, who is Director (Planning) of HMDA, is currently under suspension.
The two, A Yadava Reddy and G Nishanth Reddy, have been arrested for allegedly helping Purushotham Reddy park his ill-gotten money into real estate and construction business, the ACB said.
Early this month, ACB sleuths filed a case against Purushotham Reddy for allegedly possessing assets disproportionate to his known sources of income.
The official, who was suspended after the case was filed, is said to be absconding.
An ACB official had earlier said the documentary value ofthepropertiespossessed by Purushotham Reddy was over Rs five crore andtheir market cost could be close toRs25 crore.