Vinayagamurthi Muralitharan, who was the former deputy leader of the LTTE and a trusted aide of the slain Velupillai Prabhakaran, was arrested on Tuesday for alleged financial irregularities during the previous Mahinda Rajapaksa regime.
Muralitharan alias Karuna, who was also a minister in the previous government, was asked to appear before the Financial Crimes Investigation Department (FCID) to record a statement on the alleged misuse of a government vehicles.
He was arrested after he appeared before the FCID, officials said.
He later became a deputy minister in the Rajapaksa government in 2010.
In January last year, when the new government took office Karuna lost his place in the government and later in Parliament.
He has been accused by human rights groups and UN agencies of being involved in human rights abuses during the civil war that ended after nearly three decades with the defeat of the LTTE in 2009.