A 46-year-old man has been arrested as part of the National Crime Agency (NCA) investigation into PPE Medpro, the company led by Doug Barrowman, husband of Baroness Michelle Mone.
The NCA opened an investigation into the company in May 2021 into suspected criminal offences committed in the procurement of PPE (personal protective equipment).
The company was awarded government contracts worth more than £200m after Baroness Mone recommended the firm to ministers during the Covid pandemic.
Baroness Mone, 52 and Mr Barrowman, 59 have denied wrongdoing.
In addition to the NCA investigation, the company is being sued by the Department for Health for £122m plus costs for “breach of contract and unjust enrichment”.
The NCA said the suspect, from Barnet, north London, was held at his home on Wednesday morning.
The agency said he had been “arrested on suspicion of conspiracy to commit fraud and of attempting to pervert the course of justice”.
Baroness Mone, born in Glasgow, founded the lingerie company Ultimo.
In 2015, the Conservative government appointed her to carry out a review into how best to encourage start-ups in areas of high unemployment.
She was given a peerage in the same year and sat in the House of Lords until 2022 when she opted to take a leave of absence from the parliamentary chamber.