Six years after India was agog with allegations that Bollywood star Shilpa Shetty's parents were trying to extort money from a Gujarat-based businessman, one of the underworld henchmen involved in the high-profile case has been arrested in Kathmandu.

Uday Shetty, who was on the Indian police's wanted list for his role in the Praful Sarees scandal in 2003, has been arrested from Nepal's Birgunj town on the India- Nepal border, security sources said here Friday.

Though Uday was arrested Monday, Nepal police have not yet released the information as a manhunt has been launched to get the rest of his gang members. While four more were caught Tuesday, sources said police are looking for at least another four.

Uday hit the headlines in 2003 when Pankaj Agarwal, the owner of Praful Sarees, a company based in India's western textile city Surat, complained to police that he was receiving extortion calls from Mumbai-based underworld figures, allegedly on behalf of actor Shilpa Shetty.

The quarrel went back to an earlier modelling contract, when Shilpa had endorsed the company but claimed to have got only a part of the money she had been offered.

From the taped telephone conversations, police said they had identified the chief of the gang, Fazl-ur-Rahman, and his henchman Uday Shetty.

While Rahman later surrendered to police, Uday fled the coop. He crossed the open border into Nepal and joined the new gang of Amar Tandon, the alleged kidnap king of the Himalayan republic.

Tandon, whose gang comprises Indians as well as Nepalis, is believed to be behind over 50 known cases of kidnapping, in which the victims were usually rich businessmen. One of the best organised criminal gangs in Nepal, he operated in style, renting at least two houses in the capital where the victims were kept till their families paid up the demanded ransom.

Besides motorcycles, the gang had at least six vehicles to transport victims and the plans were said to be chalked out in Mumbai.

In February 2008, Nepal police caught Tandon and some of his associates from the Balaju area of Kathmandu and following his interrogation, the hunt started for Shetty and the remaining members.

Though Tandon remains behind bars in Kathmandu's Central Jail, Uday and the other members had reportedly been carrying on with his legacy undaunted. They abducted the son of a finance company owner in Nepal's Butwal town last month, followed by the abduction of a poultry owner in Kathmandu and three more people in Birgunj this month, the police alleged.

Though Nepal police knew Uday was part of Tandon's kidnapping gang, they apparently did not have any idea that he was also involved in the high-profile case in India.