Second colleague of Duncan Bannatyne arrested as part of investigation into multi-million fraud

Arrest of Graham Armstrong follows that of Christopher Watson, Mr Bannatyne's finance director, last week

Duncan Bannatyne left school at 15 and was still penniless at 29 (Colin McPherson)

A second arrest has been made in an investigation into an alleged multi-million pound fraud at Duncan Bannatyne's business empire.

Graham Armstrong, 43, who previously worked as the chief executive and managing director at the TV Dragon's company, has been arrested on suspicion of fraud.

The Bannatyne Group, based in Darlington, County Durham, said the arrest related to a matter they themselves had reported to the police.

They said he had been suspended some time ago after they had launched their own investigation.

This follows the arrest last week of 45-year-old Christopher Watson, Mr Bannatyne's finance director.

A company spokesman said: "This news relates to a matter that the company informed the police about some time ago.

"The individual was suspended during the thorough investigation process. There has been no effect on the successful operation of the business."

Started by the celebrity entrepreneur in 1996, The Bannatyne Group runs health clubs and hotels across the country.

A Durham Constabulary spokesman said: "We can confirm a 43-year-old man was arrested on Wednesday, December 17 on suspicion of fraud.

"The investigation involves an alleged multi-million pound fraud on a Darlington-based business.

"The man has been bailed pending further enquiries."

Having appeared in the hit BBC show Dragon's Den since it started in 2005, Mr Bannatyne announced earlier this year that he would be leaving the show.

Press Association