Ponmudi was the minister for mines and minerals and higher education in the previous DMK government that was voted out last May.
Ponmudi's arrest in Villupuram, around 150 km from here, comes a day after the Madras High Court dismissed his anticipatory bail plea.
The police have registered a case against Ponmudi on a complaint that his son, Gowtham Sigamani, and other close relatives were involved in quarrying of red sand and not paying any fee to the state.
The alleged loss of revenue for the state is estimated to be around Rs.28 crore.
Ponmudi, a senior DMK leader, was the minister for mines and minerals in 2007 when his son and other relatives were granted the mining licence.
Speaking to reporters during his arrest, Ponmudi said the case against him was a false one and he would face it legally.
In August too, Ponmudi was arrested in a land grab case but was let out on bail.
Chennai: Tamil Nadu Police Saturday arrested former DMK minister K. Ponmudi in a red sand quarrying case.
First Published: Saturday, October 06, 2012, 14:50