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

Graham Armstrong, 43, who previously worked as the chief executive and managing director at The Bannatyne Group, has been arrested on suspicion of fraud.

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

A spokesman for The Bannatyne Group, which is based in Darlington, County Durham, 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 firm runs health clubs and hotels across the country.

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

Mr Armstrong has been bailed by police.