Prime accused Abdul Karim Telgi has said that at least two prominent Karnataka politicians and some senior police officers of the state were involved in the fake stamp paper scam, highly placed sources said. However, the sources refused to disclose the names.

Also Read Telgi to be administered 'Truth Serum'

Telgi revealed the two names on Monday when he was subjected to a narco-analysis test at Victoria Hospital in Bangalore in the presence of top Forensic Science Laboratory scientists and sleuths of Maharashtra's Special Investigation Team. When asked how much money he had paid them, Telgi reportedly said, "It's personal."

He made it clear that lower-rung police personnel had no hand in the racket.

Telgi has been undergoing lie detector and related tests for three days since Friday following a directive from the Bombay high court.

In Mumbai, the SIT arrested a key associate of Telgi under the Maharashtra Control of Organised Crime Act.

Vijay Desai allegedly acted as marketing manager of Telgi's syndicate. He had been absconding since the Mumbai police exposed the racket one and a half years ago. He might be able to explain Telgi's financial dealings, SIT sources told PTI.

He reportedly helped Telgi conduct surveys in major cities like Mumbai, Surat, Ahmedabad, Jaipur, Indore and Delhi to assess business potential and prepare retail marketing strategies for these places.

"Just before the scam was exposed by the Pune police in August 2002, Telgi was so impressed by the market potential of Ahmedabad that he had chalked out a massive plan to make it his second major business centre after Mumbai and had even expressed a desire to shift the production centre there," a SIT official said.