Avishkar Jeevan Vividdhodesha Sahakara Sangha president Lokesh and director Dilip Suppekar, accused of cheating the customers, were arrested by police.
The Mysuru-based Sangha president Lokesh and director Dilip had collected money from customers in their Udupi branch.
Following rumours of lack of transparency, customers had decided to withdraw their deposits.
When the duo failed to return deposits, the customers filed complaints with the police.
A case was registered at Udupi station. The duo, arrested in Mysuru, were remanded to judicial custody for a fortnight after being produced in a court.