French police detained Stephane Richard, CEO of France Telecom SA (NYSE:FTE), on Monday in Paris as part of an investigation centered on businessman Bernard Tapie, according to numerous media reports. Richard could be released within 48 hours of his arrest if no charges are filed.

The questioning of the chief of France’s largest telecommunications and Internet access provider, which operates throughout Europe under the Orange brand, is the latest in the ongoing investigation known in France as “L’Affaire Tapie.”

Investigators want to know if French officials granted Tapie arbitration in his decades-long legal dispute against Paris-based bank Credit Lyonnais -- which was bought by Credit Agricole SA (EPA:ACA) in 2003 -- over the 1993 sale of Adidas AG (ETR:ADS). Tapie was a majority shareholder of the German athletic-wear company at the time and alleged the company was sold to French businessman Robert Louis-Dreyfus, who passed away in 2009, without Tapie’s prior knowledge.

Before becoming the chief executive of France Telecom, Richard was chief of staff to Finance Minister Christine Lagarde, who referred Tapie’s legal dispute to an arbitration court, which quickly ruled in Tapie’s favor, granting him €420 million ($555.2 million). It's widely speculated that Tapie won a much larger settlement in a state arbitration panel than he'd have won in court, and that the ruling had political overtones related to Tapie's support of Nicolas Sarkozy in his successful 2007 presidential election.

Tapie’s support for Sarkozy, a conservative of the Union for a Popular Movement party, was seen as out of place because Tapie had been minister of city affairs under Socialist Prime Minister Pierre Bérégovoy of the François Mitterrand administration in the early '90s. Tapie has said he supported Sarkozy for his tax policy.

Lagarde now heads the International Monetary Fund. She has been named a material witness after being questioned by investigators last month. According to the Wall Street Journal, Richard is being questioned for his role in setting up the government arbitration panel. His home had previously been searched.

One member of the arbitration panel, Pierre Estoup, was recently put under formal investigation for fraud charges stemming from the ruling in Tapie’s favor.