Here are the 10 latest developments:
The alleged scam is centred around a woman named Saritha Nair and her former live-in partner Biju Radhakrishnan. Together, they had formed a company "Team Solar", engaged in erecting solar panels at offices and homes. They had managed to collect crores of rupees from influential people in the state on the promise of providing the equipment to tap green sources of energy.
Ms Nair was arrested on June 3. Mr Radhakrishnana was arrested from Coimbatore in Tamil Nadu today after the police had launched a manhunt to locate him.
Since Ms Nair's arrest, a TV channel backed by the Communist Party of India-Marxist came out with a list of calls made by Nair, which showed that she had maintained close links with the office of Mr Chandy.
Mr Radhakrishnan has revealed that he met the chief minister in Kochi last month. Mr Chandy says he agreed to this meeting at the request of a Congress MP.
In the Kerala Assembly today, the chief minister admitted that "liberal and unconditional access" to his office had been misused.
Last week, he sacked two members of his staff who were in frequent and close touch with the arrested couple.
The Opposition claims that Chief Minister's Office bent rules and attempted to aid Ms Sarita's company in getting government contracts. "The chief minister is trying to hoodwink the people and mislead the house by giving flimsy explanations," said Opposition leader V S Achuthanandan today in the Assembly.
Police sources say Mr Radhakrishnan, after his arrest, is being brought to Kollam, where a criminal case is being made against him, dating back a few years, when his wife was murdered.
He claims that Ms Nair received frequent calls from Ganesh Kumar, who was a minister in Mr Chandy's government. Mr Radhakrishnan alleges this impact his personal life.
Ganesh Kumar was forced to resign as minister in April after his wife accused him of physical abuse and torture.
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