Adviser for lawmaker Clive Palmer arrested over alleged kidnap of bank executive

SYDNEY - A senior media adviser for Australian lawmaker Clive Palmer, whose party holds the balance of power in the Senate, has been arrested as part of an investigation into the alleged kidnapping of a bank executive on an Indonesian island.

Queensland Police confirmed on Friday that two men were arrested in Brisbane and a warrant was issued for a third person, currently not in Australia, as part of an investigation by a taskforce looking into financial crime and criminal motorcycle gangs.

The Australian Broadcasting Corporation (ABC) said the three were alleged to have lured the National Australia Bank executive to Singapore and on to Batam Island in Indonesia using the pretence of a possible job offer from mining magnate Palmer.

Once there, the executive was strip searched, threatened and forced to make a statement recanting evidence he was providing in a A$70 million civil case, the broadcaster said.

Palmer confirmed his media adviser Andrew Crook had been detained but said he knew nothing of the case.

"I've got no idea, no knowledge of it," Palmer told Reuters by telephone on Friday.

In comments to the ABC, Palmer suggested the arrest was linked to political opponents, saying "it's a black day for Australia if any of this... has anything to do with political freedom in this country".

The broadcaster reported that a third warrant was issued for Australian Football League player Tony Smith who lives in Bali and who was involved in the civil suit.

The police statement said the charges stem "from an elaborate scheme which police will allege was planned partly in Queensland with key elements executed in Singapore and Indonesia before returning to Queensland where the offences were committed".

In a statement, National Australia Bank said it gave police "details of unsolicited approaches made to an employee in regards to evidence they gave in a civil court trial involving a former customer".

The bank said its employee, whom it did not name, had done the right thing by "reporting these approaches when they happened".

"This has been a difficult time for our employee. They have been concerned for their own safety and that of their family," the bank said.

Palmer has been a major figure in Australian politics over the past year. His Palmer United Party (PUP) holds the balance of power in the Senate, giving him leverage over Prime Minister Tony Abbott's government on several key issues.

Palmer is also embroiled in a legal dispute with China's Citic Pacific over the Chinese company's mining rights to the $9.6 billion Sino Iron Project in Western Australia.