After remaining elusive for the last few days, Indian Administrative Service (IAS) official Y. Srilakshmi, who figures as accused number four in the case, reached the CBI office at Koti.
The CBI officials began questioning her. Officials said the questioning may continue till evening.
Srilakshmi, who is currently family welfare commissioner, was industries secretary in-charge of mines when Obulapuram Mining Company (OMC) owned by Janardhana Reddy was granted leases for mining iron ore in Anantapur district.
Srilakshmi, who was already questioned by CBI several times, went on leave last week and proceeded to Chennai. She returned to Hyderabad Wednesday.
CBI last Saturday arrested former director of mines V.D. Rajagopal in the illegal mining case and is currently questioning. He was the third accused to be arrested in the case.
Janardhana Reddy and OMC managing director B.V. Srinivas Reddy, who were arrested Sep 5, are currently lodged in Chanchalguda Central Jail here.
CBI believes several public servants were hand-in-glove with OMC in illegal mining in Anantapur district.
Srilakshmi, however, has denied any wrongdoing. She has already told the CBI that she took the decisions as per rules.
CBI has also quizzed Home Minister Sabita Indra Reddy, who was minister for mines from 2004 to 2009 when OMC was granted mining leases.
The federal agency has also questioned YSR Congress party chief Y.S. Jaganmohan Reddy for his alleged business links with Janardhana Reddy.