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The arrested have been identified as Mohammed Hasim (27), Mohammed Raazim (24), Nisar aka Riyaz (33), and Abubaker Siddique (27).
The businessman, Abdul Latheef, was hacked to death in broad daylight by the gang at Mulki on Friday, police said.
Two friends of the businessman who were with him were also attacked.
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Police have seized the weapons and vehicles used to commit the crime.
Investigation is on to find out the reason behind the killing and to trace other people involved in the crime, police added.