The director of Ringing Bells, the Indian firm which claimed to be selling the world’s cheapest smartphone, has been arrested on allegations of fraud.
Mohit Goel was held after one of the phone’s distributors claimed it had not received handsets it had paid for.
The Freedom 251 phone, priced at 251 rupees ($3.70; £3), went on pre-sale in February 2016.
But while many customers got their phones, Ringing Bells is accused of not fulfilling all of its orders.
The distribution company, Ayam Enterprises, said it paid 3m rupees ($45,000; £35,800) after Mr Goel persuaded it to distribute the phone.
But it claimed only 1.4m-worth of devices were delivered and alleged staff received death threats if they “kept asking for the money again and again”.
Police spokesman Rahul Srivastava confirmed the arrest to the BBC, and said that Mr Goel would appear in court on Friday.
“A number of similar complaints have been filed against him from other parts of the state. We want to investigate these claims thoroughly,” he said.
“It’s important for us to expose these scams because innocent people end up losing their hard-earned money.