is to face criminal charges over his failed business interests.

Mr. Peniston, 41, is currently on Police bail after being arrested on Monday.

Police are releasing few details about the arrest, which is believed to be in connection with travel firm Bermuda Travel and Shipping, which went bust last year owing $1.4 million.

Spokesman Sgt. John Dale said: "A 41-year-old Southampton man was arrested at Police headquarters at 1.45 pm on Monday and was released later that day. No charges have been made as yet and investigations are continuing.'' Mr. Peniston is also due to be served soon with at least one statutory demand for money from creditors of Bermuda Vacations, a local tour boat operator which he owns with self-made millionaire Mr. Robert Thomson.

One of the demands will be from Mr. Thomson himself, who has become Bermuda Vacations' largest creditor since he paid $155,000 to clear off the firm's debts with Bermuda Commercial Bank. Mr. Thomson and Mr. Peniston were co-guarantors of the loan.

Mr. Thomson, who resigned as a director of Bermuda Vacations two weeks ago, said he decided to pay off the whole loan, including Mr. Peniston's share because it was "ludicrous'' to continue paying a nine percent interest rate to the bank.

Mr. Thomson said yesterday: "I'm expecting the demand to be served on him very soon. I also understand that there might be three or four demands for money going in from other creditors.'' The demands are not against Mr. Peniston himself, but against the company, of which he is majority shareholder.

Mr. Thomson, a Scotsman who became a multi-millionaire by selling his US-based computer software company, is already involved in other litigation against Mr.

Peniston over an $80,000 unpaid loan he says he made to the Bermudian.

The case, which has been adjourned twice, is scheduled to be heard at Supreme Court on May 15.

Mr. Thomson yesterday denied that he had made a complaint to Police which led to Mr. Peniston's arrest.

"I was as surprised as everybody else when I heard he had been taken in by the Police,'' said Mr. Thomson, who lives in Smith's Parish. Police confirmed his story.

Mr. Thomson revealed that he is to seek the winding-up of Bermuda Mr. Peniston yesterday referred inquiries to his lawyer Mr. Delroy Duncan, of Hall, Duncan and Trott. Mr. Duncan could not be reached for comment.