New Caledonia's President, Harold Martin, has been placed under formal investigation as part of a probe into tax breaks for 3G telephone operators.
Mr Martin has been granted conditional release pending an investigation on charges of conflict of interest.
Mr Martin has denied any wrongdoing, saying allegations against him are slanderous denunciations and lies.
Prosecutors opened an investigation after administrators in the territory's postal and telecommunications office reported serious irregularities in accounts related to 3G mobile telephone operators.
A lawyer and an accountant have also already been placed under investigation over the affair.