Police detective Sarath Lugoda said the man had been living in Sri Lanka for about 3 years and is suspected to be linked to an abduction and ransom racket on behalf of the Liberation Tigers of Tamil Eelam.

He declined to give any other details of the arrest, including the name of the businessman.

However, police said that some of their own ranks had also been involved in extortion and abductions.

Among some 433 people arrested since September 2006, there were policemen, security personnel and even an employee of the defence ministry, police said.

The disclosure came as police reported that five more bullet-riddled bodies were found in the north-central district of Anuradhapura on Tuesday, 3 days after 5 other bodies bearing bullet injuries were found near the capital.

Police chief Victor Perera told reporters today that the killings were aimed at discrediting the government.

"There is a lot of attention by foreign organisations on the human rights situation here and these killings and abductions cause big problems for the government internationally," Perera said.

He did not say how many people were victims of abductions.

Rights organisations have said that a large number of people had been killed in the past year. Abuses had increased as a result of the escalating conflict between troops and separatist Tamil Tiger guerrillas.