17 Black owner Yorgen Fenech was arrested on Wednesday morning after he was intercepted at sea aboard his yacht by Armed Forces of Malta personnel.
The businessman is a "person of interest" in the investigation into the murder of Daphne Caruana Galizia, Prime Minister Joseph Muscat later confirmed.
Witnesses said the luxury yacht Gio was intercepted by an AFM patrol boat shortly after it left Portomaso marina in St Julian's around 5.30am. Data from vessel tracking website Vessel Finder showed that the yacht was back at shore within an hour of departing.
According to a source close to the investigation, a warrant, sought by the team investigating the 2017 murder, was signed by a magistrate "in a rush in relation to the attempted escape."
Mr Fenech was believed to be on route to Italy, however that was not believed to be his final destination.
Dr Muscat said he was not privy to details of the arrest, adding that whatever he said might jeopardise the case.
Police have yet to make any comment. Officers have 48 hours to question him before either arraigning him in court, releasing him unconditionally, or releasing him on police bail.
The incident comes a day after Prime Minister Joseph Muscat signed a letter that assures a presidential pardon to a man who claims to know the mastermind behind Ms Caruana Galizia's murder.
Marina access closed off
A Times of Malta reporter was present at Portomaso in the early hours of the morning but he was declined entry to the site by a security officer, who called in the police. A reporter returned to the site at 7.30am but found a security officer standing guard.
Video footage from inside the marina showed AFM personnel combing the docked vessel at Portomaso. They left the yacht at 8.20am. As of 9.50am, two AFM patrol boats were stationed in open seas off Portomaso, in the area where Mr Fenech's yacht was intercepted.
A police spokesman declined to comment. An AFM spokeswoman could not be reached at the time of writing.
17 Black linked to minister, chief of staff
An FIAU report had identified him as the owner of Dubai-registered company 17 Black.
17 Black was identified in a leaked e-mail as one of two sources of income for the Panama companies Hearnville and Tillgate, which were set up by Office of the Prime Minister consultants Nexia BT for Minister Konrad Mizzi and the Prime Minister's chief of staff Keith Schembri.
Prime Minister Joseph Muscat said on Wednesday morning that he had no indication "until now" that the minister or chief of staff were linked to the murder case.
Former Opposition leader Simon Busuttil and MEP David Casa both said Mr Fenech's arrest made the Prime Minister's position untenable.
"He must RESIGN NOW and let JUSTICE take its course," Dr Busuttil, a Nationalist Party MP, tweeted.
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