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Arresting Fidentia chief executive J Arthur Brown last Friday was the "most dramatic means possible" to secure his court attendance, the Cape Town Magistrate's Court heard on Monday.
Defence attorney William Booth said an arrest was the most serious invasion of privacy anyone could endure.
He said he suspected the warrant used for Brown's arrest was in itself irregular.
If so, Brown was entitled to his immediate release.
Brown made a court appearance before magistrate Vusi Mhlanga soon after his arrest last Friday.
At Monday's proceedings, Scorpions prosecutors Bruce Morrison SC and Tersia du Toit, alleged Brown's wife, Susan, had fled the country last month to evade arrest.
Probe Brown's wife's departure
They contend Brown himself was now under further police investigation for assisting her.
Brown was arrested on charges of fraud, theft and money laundering, this time involving the company Antheru - he is already facing similar charges in the Fidentia saga.
Morrison asked on Monday for a seven-day remand to probe Brown's wife's departure, among other things, and said the State would oppose any application for bail.
The Scorpions request for a seven-day postponement evolved into full-fledged proceedings.
Defence attorney William Booth said Friday's arrest warrant "may be irregular", arguing the warrant was issued on the strength of allegations contained in a supporting affidavit.
Eamine the affidavit
He said he needed to examine the affidavit, but that Morrison and Du Toit had declined to give him access to it.
He added: "They say I must approach the High Court to get access to the affidavit."
Booth said Brown's arrest had been unnecessary, as an arrest was only justifiable in terms of the constitutional Bill of Rights if there were no other way of securing a suspect's attendance in court.
"Investigators have to first consider all other options, before resorting to arrest," he said
He alleged that the application for an arrest warrant, to Cape Town's deputy Chief Magistrate, Sam Maku, was in itself irregular, as was the execution of the warrant (Brown's arrest).
The hearing continues.
Sapa