Local Government officers Rehmatullah Sheikh and Manzoor Abbasi were arrested from Clifton on Sunday night.
They accused embezzling crores of rupees in District Municipal Corporation Malir and making payments to bogus companies through fake bills.
The arrested accused Rehmatullah Sheikh has also been the focal person of Sindh Local Government Ministers Saeed Ghani and Nasir Shah.
Rehmatullah Sheikh was recently removed from office by the Sindh Chief Minister.
Rehmatullah Sheikh is also accused of fake recruitments and irregularities amounting to crores of rupees in District Municipal Corporation East Karachi.
Manzoor Abbasi has earlier voluntarily returned money in a NAB case and an investigation is underway against him in connection with assets in excess of income, sources said.
