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Sri Lanka police arrest ex-leader's brother on suspicion over funds

COLOMBO (Reuters) - Sri Lankan financial crime police arrested on Monday a brother of former President Mahinda Rajapaksa for a third time over suspicion of state fund misappropriation when he was economic development minister, a lawyer said.

Rajapaksa's younger brother, Basil, is on bail after being arrested twice foralleged misappropriation of state funds and a land deal allegedly involving money laundering. Court hearings into the two cases are going on.

Sri Lanka's new president, Maithripala Sirisena, faces pressure to act on allegations of corruption dating back to the Rajapaksa era, especially from civil society organizations who backed his successful bid to oust Rajapaksa last year.

Mahinda Rajapaksa, who was president for a decade until January 2015 and is now an opposition legislator, is popular among many ethnic majority Sinhala Buddhists who credit him with ending a 26-year-war against ethnic Tamil rebels in 2009. He is trying to rally opposition to the current government with the help of Basil.

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Basil Rajapaksa's lawyer, Jayantha Weerasinghe, told Reuters police had taken his client to court regarding the supply of building materials to district councils when he was a minister.

"There is nothing illegal and it is an utterly false allegation," Weerasinghe said.

Neither Basil Rajapaksa nor his family members were immediately available for comment.

Several members of the Rajapaksa family are facing police investigations for alleged financial crimes. They include Mahinda Rajapaksa and his brothers Basil and Gotabaya.

Mahinda Rajapaksa's eldest son,Namal Rajapaksa, who is also a member of parliament,was released by a court on bail on Monday, media reported.

He was arrested on July 11for suspected misappropriation of funds in a high-end apartment project.

NamalRajapaksa denies wrongdoing as do his father and other relatives facing investigations.

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Robert Birsel)