Reuters International

Minister of Economic Development and President Mahinda Rajapaksa's brother, Basil Rajapaksa, speaks during an interview with Reuters in Colombo April 10, 2012. REUTERS/Dinuka Liyanawatte

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COLOMBO (Reuters) - Sri Lankan financial crime police arrested on Monday a brother of former President Mahinda Rajapaksa for a third time over suspicion of state fund misappropriation when he was economic development minister, a lawyer said.

Rajapaksa's younger brother, Basil, is on bail after being arrested twice for alleged misappropriation of state funds and a land deal allegedly involving money laundering. Court hearings into the two cases are going on.

He has denied any wrongdoing.

Sri Lanka's new president, Maithripala Sirisena, faces pressure to act on allegations of corruption dating back to the Rajapaksa era, especially from civil society organisations who backed his successful bid to oust Rajapaksa last year.

Mahinda Rajapaksa, who was president for a decade until January 2015 and is now an opposition legislator, is popular among many ethnic majority Sinhala Buddhists who credit him with ending a 26-year-war against ethnic Tamil rebels in 2009. He is trying to rally opposition to the current government with the help of Basil.

Basil Rajapaksa's lawyer, Jayantha Weerasinghe, told Reuters his client was remanded in custody until Aug. 1 after police took him to court over the supply of building materials to district councils when he was a minister.

"We pointed out that nothing is irregular about this transaction. But irrespective of what we said, he was remanded," Weerasinghe said.

Neither Basil Rajapaksa nor his family members were immediately available for comment.

Several members of the Rajapaksa family are facing police investigations for alleged financial crimes. They include Mahinda Rajapaksa and his brothers Basil and Gotabaya.

Mahinda Rajapaksa's eldest son, Namal Rajapaksa, who is also a member of parliament, was released by a court on bail on Monday, media reported.

He was arrested on July 11 for suspected misappropriation of funds in a high-end apartment project.

Namal Rajapaksa denies wrongdoing as do his father and other relatives facing investigations.

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Robert Birsel)

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