The tycoon is also wanted in the United States on financial fraud charges which are unrelated.

The Cyprus Stock Exchange (CSE) and the securities and exchange commission later Tuesday decided to suspend trading in Global Consolidator (formerly Globalsoft) to "protect investors following the arrest of Lykourgos Kyprianou".

A police statement said he was arrested to help with inquiries concerning "conspiracy to defraud and securing currency export permission from the central bank under false pretenses."

Kyprianou is suspected of having used front companies to siphon millions out of the country and of bolstering company accounts with non-existent revenues.

The Nicosia businessman who set up CSE-listed company Globalsoft is expected to appear before a district court on Wednesday where prosecutors will request he be remanded in custody, police said.

Software firm Globalsoft was once considered a blue chip giant of the CSE with a market capitalisation of nearly two billion dollars two years ago.

Globalsoft floated on the CSE to much fanfare in April 2000 but since hitting a premium share price of 10.50 dollars its share value has dwindled to around 14 cents.

The fall has mirrored a similar decline in the CSE which over the past three years has crashed from an all-shares index high of 849 points in November 1999, and stood at a level of 82.83 on Tuesday.

The securities and exchange commission probed Globalsoft for possible violations of stock market regulations and offering investors inadequate information about the company's financial situation.

The case file was passed on to the attorney general's office to decide whether any criminal offence had was committed.

In a separate case, Kyprianou was last year charged by the US Security and Exchange Commission with insider trading and financial fraud in relation to American IT firm and then Nasdaq-listed Aremisoft.

In its financial report of 2000, Aremisoft reported revenues of 90 million dollars from its emerging markets group which it has been unable to substantiate to US authorities.

Aremisoft was a one-time stakeholder in Globalsoft.

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