Businessman K P Bhardwaj and Manager of Ambala branch of the Corporation Bank D K Dhar were arrested following raids conducted on residence and hotel of Bharadwaj and clues provided by him during questioning with regard to the money trail, Inspector General of Police P L Thakur told PTI.
With this, the number of people taken into custody has risen to five.A spokesman for the Karmapa has denied any Chinese links and described the allegation against him and his administration as "grossly speculative and without foundation".
The IGP said Bharadwaj had told the police that the bank manager had issued an "authorisation letter" that the money was meant for some land deal.The police arrested two persons -- Ashutosh and Sanjay Dutt -- on January 26 after alleged recovery of Rs 1 crore and later nabbed Shakti Lama, a key functionary of the Karmapa backed trust, who were remanded in police custody for nine days.
The police is likely to question the Karmapa about the foreign currency recovered from the trust and premises of his aides.The sleuths of Intelligence Bureau, Enforcement Directorate and Income Tax Department have also joined the probe.
"The police have so far not reached any conclusion about the source of the money and all documents including the computer of Karmapa were being thoroughly scanned," Thakur said, adding that the police had never said anything about "Chinese links" of the Karmapa.
The statement by the Karmapa's office said, "We categorically deny having any link whatsoever with any arm of the Chinese Government and like to state that the allegations being levelled against the Karmapa and his administration are grossly speculative and without foundation in the truth as everyone who knows the history of our lineage and struggle is surprised by the allegations."
It said, "Monasteries across the world accept offerings from devotees in various forms and there is nothing surprising, new or irregular in this. "A representative of Dalai Lama's office underlined this yesterday and the cash in question under the current investigation by the police is offerings received for charitable purposes from local and international disciples from many different countries wishing to support the Karmapa's various charitable activities and any suggestion that these offerings were to be used for illegal purposes is libelous," the statement said.
Referring to recovery of Chinese currency, it said "About the Chinese currency we can say that his Holiness has a large following of Tibetans from Tibet who make donations in Chinese currency.
"The fact is that the Karmapa has millions of followers around the world, who hold him in the highest esteem and reverence and all our dealings across the world are honest and completely transparent and anything else would be contrary to the Buddhist principals that we live by."
A spokesman for the Karmapa later said when he came to India, there was international media coverage "through which the misrule of China in Tibet was exposed."
"His very escape and arrival in India exposed the Chinese misrule in Tibet and confirmed what the world believes that the Tibetans and Tibet were under suppression and were not happy," he said.
When he came to India, his immediate act was to rush to the Dalai Lama to seek his blessings and to offer his allegiance and loyalty to the Dalai Lama as both the spiritual and temple head of the Tibet and also give unquestioned support to his struggle for the Tibetan people, he said.
"He assured me he has never done anything in any way to undermine the interest of India..., to harm the interest of India. India is his second home. He is happy here and he looks forward to India becoming a powerful and prosperous nation. And he has no intention in any way of undermining the interest of India," the spokesman said.