A Papua New Guinea MP, Paul Tiensten, is due to appear in court tomorrow on a charge of misappropriation.
The former national planning minister was arrested and charged by police in Port Moresby yesterday after he returned from Australia.
Mr Tiensten had fled to Brisbane in September when the allegations first surfaced but announced last week that he would return to fight the allegations.
The newspaper, The National, reports the charges relate to six million US dollars in funding released to an East New Britain businessman, Eremas Wartoto.
The paper reports that the police fraud squad director, Inspector Timothy Gitua, saying Mr Tiensten has been charged with misappropriation, conspiracy to defraud the state and abuse of office.
He is free on bail.