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A wealthy businessman with close ties to a member of President Boris Yeltsin's inner circle has been arrested on drug charges.

Boris Fyodorov, head of the National Sports Fund and chairman of the National Credit bank, was arrested Tuesday by Moscow-area police working with an anti-drug squad, police spokesman Gennady Melnik said Wednesday.Fyodorov was charged with drug possession, said Melnik, who refused to release any other details.

Fyodorov has been closely linked to Shamil Tarpishchev, the sports minister, Yeltsin's tennis coach and a powerful Kremlin insider.

Operating under Tarpishchev's aegis, the National Sports Fund was Russia's largest importer of alcohol and cigarettes thanks to a special government tax exemption.

Experts say the government may have lost billions of dollars in tax revenues by the time the tax break was ended earlier this year.

Tarpishchev moved quickly Wednesday to distance himself from Fyo-dorov, who is not to be confused with a former Russian finance minister with the same name. He said he ended ties with the fund since he resigned as its chairman in 1994 to become Russia's sports minister.

"Fyodorov has been in charge of all fund's affairs since then," he was quoted as telling the ITAR-Tass news agency.

"If Fyodorov is guilty of anything, it's up to the court and not a sneaky journalist to determine his guilt," he said.