The troubles of the privateGerman media fund VIP Medienfonds took a dramatic turn on Wednesday (October 5)with news that its CEO Andreas Schmid has been arrested.

Schmid was taken intocustody by the Munich's public prosecutor's office as it was feared he mightflee the country, leading German fund news service Fondstelegramm reportedtoday.

Earlier in the day, VIP hadannounced that Schmid had relinquished all of his duties within the VIP Group"with immediate effect until the clarification of the legal difficulties".However, it was intended that he - at that point - would continue advising themedia fund on its activities

This latest developmentcomes after Munich's public prosecutor began investigations last week intoalleged professional fraud and tax evasion by VIP (, Sept30).

VIP has backed a string ofHollywood features in recent years. VIP is currently involved in the financingof Tom Tykwer's big-budget adaptation of the best-selling novel Perfume,Paul Verhoeven's Second World War drama Black Book, and the sequel tothe 2004 German comedy 7 Zwerge - Maenner Allein Im Wald, 7 Zwerge - DerWald Ist Nicht Genug.