Harvesh Seegolam, the former central bank governor of Mauritius, was charged with fraud on Thursday and released on bail, his lawyer said, a day after he was arrested alongside the former finance minister over alleged theft from a state company.

Seegolam and former finance minister Renganaden Padayachy have denied wrongdoing in the investigation into the reported embezzlement of 300 million Mauritius rupees ($6.70 million) from the Mauritius Investment Corporation, set up to help companies deal with impact of the COVID pandemic.

"Seegolam is collaborating with the authorities. He is giving all evidence and information related to this case," Seegolam's lawyer told reporters.

The Financial Crimes Commission said the investigation into Padayachy had not been completed and so opposed his release.

Remanded in custody

Padayachy has been remanded to police custody and will reappear in court on April 17, the commission spokesperson said.

Padayachy's lawyer, Raouf Gulbul, said he would fight the charges.

"In a match, it’s not the first player to score who wins the match.

A match is played over 90 minutes. I am not afraid of new allegations against my client," Gulbul told reporters.

The government of Prime Minister Navin Ramgoolam, who won power in a November election, has accused the previous administration, under which the two former officials served, of falsifying data on economic growth, the budget deficit and public debt for years.

One of Ramgoolam's first moves was to launch an audit of public finances. His predecessor, former prime minister Pravind Jugnauth, was arrested in February on charges of money laundering, which he has denied.