Nabil Karoui's arrest on Friday evening came hours after his television channel was banned from covering campaigning.
"About 15 police cars blocked the road and rushed to Nabil Karoui's car before armed civilian police asked him to come with them, saying they had instructions to arrest him," said Oussama Khlifi of the mogul's Qalb Tounes party.
Private radio station Mosaique FM quoted a judicial official Friday confirming that an arrest warrant had been issued against Karoui and his brother Ghazi for money laundering.
This is (the English translation) of the article that took Nabil Karoui to prison. https://t.co/GuZbDU9yIvMed Dhia Hammami - محمد ضياء الهمامي (@MedDhiaH) August 23, 2019
"There is no doubt that the decision was political, because such an abnormality can not be committed by an impartial judge," Karoui's lawyer Kamel Ben Messaoud told RFI, and added, "It is a judge who serves the executive branch."
Broadcasting without licences
Tunisia has been seen as a rare success story among nations that underwent the Arab Spring uprisings, emerging as a nascent democracy.
Karoui was among 26 presidential candidates given preliminary approval this month to run in the election, set for September 15.
The tycoon was charged with money laundering in early July shortly after stating his intention to stand in the polls, but has remained a leading candidate.
His apparent arrest came the same day as authorities announced a ban on three local outlets, including Karoui's Nessma TV, from reporting on the election campaign, after they had broadcast "illegally" without licences.
Karoui has been accused by regulators and some politicians of using Nessma to bolster his political ambitions.
'Favours in cash and kind'
The station, launched in 2007, has played up his charity work with footage of him handing out food and clothing.
He was nearly removed from the race in June when parliament passed an amended electoral code that would bar any candidate who handed out "favours in cash or in kind" in the year before the vote.
But then-president Beji Caid Essebsi neither rejected nor enacted the bill, leaving the door open for Karoui to run.
The polls were brought forward from November, following Essebsi's death last month.
Karoui had been an active supporter of Essebsi's election in 2014 and has become the fiercest rival of Prime Minister Youssef Chahed, who is also running for president.
He formally stepped down from Nessma's management after being criticised by international observers for his channel's partisan conduct during the 2014 campaign, and officially joined Essebsi's Nidaa Tounes party in 2016.
But he subsequently made no secret of continuing to pull the strings at Nessma, while honing his political profile.
Tunisia's broadcasting authorities banned Nessma in October 2018, but it did not comply and remains on air.
The regulator accuses the channel of "positioning itself to influence government bodies", and rebuked it for not having disclosed its shareholders, reportedly including Italian politician Silvio Berlusconi.
Karoui has said he is being targeted by "attempts to undermine his growing popularity".