Officers from the Directorate of Criminal Investigations (DCI) on Thursday arrested former Uchumi Chief Finance Officer Chadwick Omondi Okumu over allegations of fraud and misconduct.
Mr Okumu was detained at the Muthaiga Police Station for the better part of Thursday morning after being picked from his house Wednesday evening.
The retailer's board sent Mr Okumu packing in June last year alongside former chief executive Jonathan Ciano for “gross misconduct and gross negligence.”
At the time, the retailer owed suppliers Sh1 billion.
Sources said Mr Okumu will be taken to the Milimani Law courts.
The officer in charge of Muthaiga Police Station, Roy Njeru, said the matter is being handled by the DCI.
His arrest comes a week after an audit report revealed fresh details on unscrupulous dealings at the the NSE-listed supermarket chain.
The audit by KPMG indicated that the retailer lacked adequate background and quality checks that led to the acceptance of conflicting suppliers, substandard products and dubious trade agreements.
It further revealed that over 45 per cent of the procurement staff did not meet the minimum qualifications set in the retailer’s human resource guidelines.
The fact finding report also implicated former CEO Jonathan Ciano for allowing his wife to supply fresh produce to the supermarket.
It is not clear whether the police are also after Mr Ciano, but sources at the DCI stated that all people linked to the losses incurred by the supermarket will be arrested.