Aam Aadmi Party (AAP) leader Sanjay Singh is the latest party leader to be questioned by federal agencies.

A now-scrapped liquor sale policy in the state is under investigation for alleged fraud.

Manish Sisodia, Delhi’s deputy chief minister, was also arrested in the same case.

In a strong denial of the allegations, the AAP accused the Bharatiya Janata Party (BJP), which runs the government, of playing “dirty politics”.

Financial misconduct is a sensitive issue for the AAP, which emerged from a major corruption movement over a decade ago.

In an effort to position itself as a key opposition force, the party has also frequently clashed with the BJP.

The Enforcement Directorate (ED) officials arrived at Mr Singh’s house early Wednesday morning to question him, the PTI news agency reported.

Other AAP politicians linked to the case will also be searched, officials said.

In August of last year, India’s federal investigation agency CBI accused the Delhi government of using a new policy to favor liquor dealers who had allegedly paid bribes. Subsequently, the scheme was scrapped.

As a result of the CBI’s investigation, the ED also filed a case under India’s money laundering law. The CBI arrested former Deputy CM Manish Sisodia in February in connection with the case – he denies the allegations but remains in jail. Singh has not yet commented on Wednesday’s raids, but his party has said it is confident there will be no evidence found.