Senior counsel Tom Ojienda has been arrested by police over the alleged loss of Sh200 million at Mumias Sugar Company.
He was nabbed on Friday afternoon at an undisclosed location in Nairobi and whisked away to the DCI headquarters on Kiambu Road.
The special team of officers, drawn from the Special Crimes Prevention Unit and Flying Squad, was on Friday evening also searching for a High Court judge and 13 other suspects.
Highly placed sources said the police sought to question Ojienda and the judge over alleged Sh200 million loss, which was raised by an audit.
A special team of investigators comprising officers from the DCI legal department and the ODPP has been investigating.
DCI chief George Kinoti could not be reached for comment, but sources said he was personally supervising the operation.
The sources said Ojienda is likely to be locked up the entire weekend. He will be presented in court on Monday after three nights in police custody.
The decision to arrest and prosecute Ojienda has been approved by DPP Noordin Haji. He received investigation files last week.
The arrest of Ojienda comes in the wake of a protracted court battle between him and the KRA over tax compliance.
He sought clearance to allow him to seek reelection as a representative of the Law Society of Kenya to the Judicial Service Commission.
The taxman has filed an appeal after High Court judge Wilfrida Okwany directed the KRA to issue him with a tax compliance certificate. The tax agency is demanding Sh443.6 million arrears from the advocate.
In its appeal, the KRA argued that Okwany erred in issuing the order. It said the directive makes the lawyer tax-compliant, despite a row over tax arrears.
Ojienda had sued the KRA, arguing that denying him tax clearance was calculated to sabotage his race to be voted as the lawyers’ representative in the JSC.