New York Times News Service

RIO DE JANEIRO, Brazil--The Brazilian police say they have broken up an international kidnapping ring that was funneling millions of dollars in ransom money to a leftist Chilean guerrilla group.

Romeu Tuma, the director general of Brazil's federal police, said last week that the group kidnapped two Sao Paulo businessmen in recent years, netting a total ransom of $65 million.

The failure of a third kidnapping, of an executive of a Brazilian supermarket chain, led to the arrest of five Chileans, two Canadians, two Argentines and one Brazilian on Dec. 17 in Sao Paulo.

The 10 were arrested at house where the executive, Abilio doe Santos Diniz, was held.

Four of the Chileans are members of the Movement of the Revolutionary Left, Romeu Tuma Jr., a Brazilian police officer, said last week after returning from Chile. The officer is the son of the police director.

In the wake of the release of Diniz, police in Sao Paulo searched six houses alleged to have been rented by the group and seized arms, police radios and surgical supplies.

The police director said that through interrogation and detective work, his investigators had established that members of the group were training in Cuba, Nicaragua and Argentina.

He said one Chilean member, Maria Emilia Badilla, had told him that "the left in Chile has no chances of growing, and the money from the kidnappings would help agitation and propaganda work in her country."

Apparently, the group had chosen Sao Paulo, South America's largest and wealthiest city, to be the center of operations.

According to the police, the kidnappers prepared dossiers on high-ranking Brazilian military and police officials and on the personal habits of 30 Sao Paulo business executives.

The police director linked the group to the 1986 kidnapping of Antonio Beltran Martinez, a Sao Paulo banker, who was freed after $4 million ransom was paid.

He also tied the group to the kidnapping in July of Luiz Sales, the president of one Brazil's largest advertising companies.

Sales was held for 65 days and freed after $2.5 million ransom was paid.