Mar.24, 2010, 11:27, Source: Xinhua

Bahrain sacked on Monday a state minister who is under investigation for involvement in money- laundering operations inside and outside the Gulf state, local al- Wasat newspaper reported Tuesday.

Bahrain's King Sheikh Hamad bin Isa al-Khalifa issued a decree relieving State Minister Mansour bin Rajab of his duties, the paper said, giving no reason behind the minister's dismissal.

On Friday, Bahrain's Interior Ministry said a senior official was arrested over accusations of conducting money-laundering operations inside Bahrain and abroad, providing no details on the suspect's identity. Yet, local press reports identified the official as bin Rajab, a minister without a portfolio, who was released later for health reasons.

The minister denied any involvement in the alleged money- laundering operations, that some local media reports said, mounted to 12 million Bahraini dinars (31.8 U.S. million dollars).

Bin Rajab, for his part, said Tuesday that the king's decision aimed at facilitating the ongoing probe.

"The accusations are completely bare of truth," bin Rajab told al-Arabiya news channel.

Al-Wasat also reported that the public prosecution started interrogating the dismissed minister on Tuesday.

Bin Rajab did not show up at a weekly cabinet meeting on Sunday, the first since the allegations were made, although he told reporters earlier he will attend. A source close to the ousted minister was quoted by the paper as saying that the minister is " definitively" barred from attending the meetings.

On Friday, the Interior Ministry's Assistant Undersecretary for Legal Affair Brigadier Rashid Bu Humood said that the arrest of the unnamed senior official came after investigations by the ministry's anti-economic crime department.

The ministry detected suspicious activities of the official in early 2009, and kept monitoring his activities inside and outside Bahrain, he said in a statement.

The official's meetings, and communications with his aides and contacts abroad were kept under close watch ever since, the statement said.

Bahrain in 2001 became the first Gulf country to issue an anti- money laundering law, which laid down legal framework to ensure the disclosure of any suspicious financial activity. The Gulf state was also chosen to host the Middle East and North Africa Financial Action Task Force (MENAFATF), a regional anti-money laundering watchdog.