Six persons were arrested from a Tollywood director's office in Banjara Hills area here today with demonetised currencies having face value of Rs 1.2 crore, the police said.
Police suspect the small-time director K Ramakrishna alias Kittu is part of a racket which is allegedly involved in exchanging scrapped banknotes of Rs 1000 and Rs 500 denominations with new ones for a hefty commission.
Acting on a tip-off, a police team raided Kittu's office last night and seized the notes.
A case was registered on the charge of cheating and under relevant sections of the IPC.
Kittu is absconding, the police said.
"Kittu had asked these people to bring old scrapped notes assuring them that he would through mediators get the money exchanged with new currency for 50 per cent commission," the Banjara Hills police station Inspector K Srinivas told PTI.
He said the accused were holding negotiations on exchanging the old notes when the police team nabbed them.
"We have informed the Income Tax department which has started an inquiry into the matter," Srinivas added.
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