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Kantharaju was the Mysuru Urban Development Authority (MUDA) Commissioner for over two years, from September 2017 to November 2019.
The details of the investigation were not known.
Karnataka Chief Minister Siddaramaiah, his wife Parvathi B M, brother-in-law Mallikarjuna Swamy and others are accused in the case.
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The MUDA had allotted plots to Parvathi under a 50:50 ratio scheme in lieu of 3.16 acres of her land, where it developed a residential layout.
Under the controversial scheme, MUDA allotted 50 per cent of developed land to the land losers in lieu of undeveloped land acquired from them for forming residential layouts.
It is alleged that Parvathi had no legal title over this 3.16 acres of land at survey number 464 of Kasare village, Kasaba hobli of Mysuru taluk.
Karnataka Lokayukta police and the Directorate of Enforcement have launched an investigation into the ‘scam’.