Subrata Roy, chairman of Sahara India Pariwar, Lucknow, India, was arrested after surrendering to police in Lucknow on Friday.
The arrest stems from an ongoing dispute over a US$3.9 billion refund to 22 million small investors, which Sahara disputes, saying its liability should be lower.
Roy is expected to be held until March 4 when he will appear before the Supreme Court.