Scotland Yard detained Arif Naqvi at Heathrow airport on request of American authorities with “alleged fraud” on recommendations by the US Securities and Exchange Commission.
The arrest came after the founder of the collapsed Dubai-based private-equity firm The Abraaj Group was charged with fraud and conspiracy in New York in relation to the collapse of the equity firm he headed.
He was detained for allegedly misappropriating more than $230 million in fund money raises the prospect of lengthy extradition hearings that could limit his movements.
Since the company’s collapse, Mr Naqvi, 58, had been keeping a low-profile in Britain where his family have at least two properties held in the names of British Virgin Islands-registered companies.
Abraaj management entered into talks for an “orderly restructuring” of its obligations, during which secured creditors were guaranteed their money but unsecured creditors were left with little more than promises of later payment, according to widespread media reports of the entire affair.
Meanwhile, Arif Naqvi defended himself in a rare interview published after his arrest but done few days before the latest development.
A statement issued by his spokesman here said that Arif Naqvi maintained his full innocence and had done nothing wrong.
Mr Naqvi, who was thought to be trying to leave the country, has been detained and will appear in court via videolink for an extradition hearing next Thursday.