Additional Director General of Police (Crime Investigation Department) Tenneti Krishna Prasad will head the inquiry panel, an official statement said even as the issue kicked up a major political storm today.
The Chief Minister directed the Director General of Police to initiate "follow-up remedial measures" based on the inquiry report.
Secunderabad Cantonment MLA and former minister P Shanker Rao was picked up by Neredmet police, under the Cyberabad Police Commissionerate, from his residence last evening for "questioning" in an alleged real-estate fraud, evoking widespread protest not only from Dalit organisations, but also from most of the Cabinet ministers.
The MLA and his brother are accused in the fraud, in which several housing plots were sold using fake documents.
After "questioning" him for a couple of hours, despite his poor health condition, police dropped him at the Gandhi Hospital and announced that he was "free to go anywhere".
The MLA is currently undergoing treatment in the Intensive Care Unit of a private hospital after he developed low blood pressure and chest pain.
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Shanker Rao had been a bitter critic of the Chief Minister and he was sacked from the Cabinet in January last year. He had also levelled allegations that the Chief Minister's kin were involved in smuggling of red sanders in Chittoor district.
The legislator had also been critical of state Home Minister P Sabita Indra Reddy and the DGP on departmental issues and corruption.