BERLIN _ The former head of the German company producing the official World Cup mascot has been arrested on suspicion of fraud a week after the company filed for bankruptcy.

Ottmar Pfaff was detained on Saturday and was being held pending an investigation into charges that he defrauded the company, Gerhard Schmitt, a prosecutor in the town of Hof, said Monday.

The company, Nici, holds the exclusive rights in Europe to produce the stuffed lion for the June 9-July 9 tournament.

The company filed for bankruptcy amid reports that sales of the mascot were not strong enough to compensate for the amount paid to secure the rights.

However, Nici said its difficulties were caused by unspecified financial "irregularities."

Soccer's governing body, FIFA, said in last week that "Nici's current financial problems are not linked to its partnership with FIFA."

Germany's Sueddeutsche Zeitung daily reported that Pfaff had been illegally taking money from the company since 2000 and using it to reinvest in the family run business to keep it from failing.