Yogendra Vasupal, CEO and co-founder of homestay aggregator Stayzilla, which shut down last month, was arrested in Chennai on Tuesday night on alleged defrauding charges. The police took him into custody after a complaint from advertising agency Jigsaw said Vasupal owed the firm dues worth Rs 1.72 crore, The Times of India reported.

Vasupal was questioned by a team led by Chennai Assistant Police Commissioner S Muthuvel Pandi and Inspector Anand Babu of the Central City Crime Branch’s entrustment fraud wing, the report said. But his wife and Stayzilla Co-Founder Rupal Yogendra refuted the TOI report, saying Vasupal had been remanded in police custody “without any confession” and that his whereabouts were unknown for hours on Tuesday after the police took him into custody.

In a blog post written by Vasupal and published by his wife Rupal on Tuesday, the Chennai-based company’s chief accused Jigsaw Advertising of harassment and intimidation. Vasupal alleged that the dispute with Jigsaw resulted from the ad agency’s “severe deficiency of services”, despite having been paid around Rs 6.5 crore. “We have repeatedly asked the other party to go to court if they felt there was anything wrong,” he said in the article titled “Help! I need everybody…”

His arrest came to light after screenshots of Stayzilla Co-Founder Sachit Singhi’s emergency email seeking help from investors Nexus Venture Partners and Matrix Partners began to circulate on social media. Singhi had faced threats to his family earlier this month, among which was a package that contained a photograph of his son with a frightening doll. Singhi told The Time of India that Jigsaw Advertising had sought the influence of a local MLA to threaten Stayzilla.

It came as a surprise to many after Stayzilla announced that it was shutting down operations. “India’s number one homestay network” had raised $34 million in four rounds of funding, but had been facing a drop in bookings, lower commissions from hotels and other cash flow troubles for months.