The director allegedly borrowed Rs 8 crore from Sreevalsam Group for producing a film.
The arrested person has been identified as Divya Darshan, city police commissioner N Shashi Kumar told reporters.
Walking out of the Kannur Central Prison, where he had been remanded for the past 96 days, Indian Union Muslim League legislator alleged a conspiracy behind his arrest.
Questions are being raised as to how Swapna, who did not have the proper qualifications, was appointed in a junior post on a salary higher than that of the director.
The police initiated the action on the basis of the complaint filed by Saiju Lal of Nattakom and Mithun K Prabhakar of Kalathipadi.
After similar deaths were reported in Kerala, the state police chief Loknath Behera announced that the Crime Branch would probe the operations of gangs committing frauds by offering loans through such apps.
The clerk, Rajneesh Thamban, allegedly swindled the money by misusing the password of the official account of the Divisional Forest Officer (DFO).
The agency carried out searches at the premises of the company and the accused directors, including former Telugu Desam Party MP Rayapati Sambasiva Rao, which led to the recovery of incriminating documents, its spokesperson said in a statement.
The construction of Anjalumoodu-Kureepuzha road was shown on papers without actually carrying out the construction work and exchequer suffered a loss of Rs 15.59 lakh on account of this.
The government told the court that Kamaruddin was the kingpin of the Fashion Gold Jewellery investment fraud in which a number of people lost their hard-earned money.