Dubai has released on bail the former head of its flagship financial district, who is being investigated in connection with alleged irregularities involving $13.6 million in bonuses, a source familiar with the matter said.

Omar bin Sulaiman, the former governor of the Dubai International Financial Centre (DIFC), was detained in an investigation into the use of public funds, said a statement from Dubai's government in March.

The case is being watched closely by the emirate's residents and investors alike, as it is part of an ongoing crackdown on corruption that could change the landscape of the Dubai business community.

'He was released on Wednesday on bail and the investigation is ongoing,' the source familiar with the matter said on condition of anonymity. The source declined to give details of the bail terms.

Bin Sulaiman and his lawyer were not immediately available for comment on the case. No statement has been made by Bin Sulaiman or his lawyer since his arrest.

A Dubai government statement in March said the investigation showed that Bin Sulaiman, in his position as DIFC governor, had obtained funds under the pretext of annual bonuses totalling Dh50 million ($13.62 million).

The government statement also said a number of similar cases would be brought before the legal system in the future.

Dubai, the Gulf's tourism and trading hub, launched a high-profile anti-corruption campaign in 2008 that saw the arrest of several well-known business figures.

Bin Sulaiman, who held a number of other high profile positions, was abruptly removed from his post as governor of the DIFC in November, days before the Dubai World debt crisis erupted, to be replaced by Ahmed Humaid al-Tayer.

Dubai's government set up the DIFC in 2002 in a bid to transform the emirate into a world financial centre on a par with Singapore and Frankfurt. – Reuters