La Paz [Bolivia], December 13 (ANI): A Bolivian court has ordered former President Luis Arce to remain in pre-trial detention for five months as prosecutors pursue an investigation into alleged embezzlement of public funds earmarked for Indigenous communities.

Arce, who stepped down from office last month, appeared via video link before Judge Elmer Laura on Friday, two days after he was detained in La Paz.

The court rejected requests from his defence for release and ruled that he be held in one of the capital's central prisons, citing the gravity of the allegations, which the judge said 'directly affect state assets and resources allocated to vulnerable sectors,' Al Jazeera reported.

The judge's decision means Arce will remain in custody while investigations continue.

No trial date has been announced yet.

Prosecutors allege that the case concerns Arce's tenure as economy minister from 2006 to 2017 under former president Evo Morales.

Authorities say large sums were diverted from a state-managed Indigenous development fund during that period.

Investigators estimate that approximately USD 700 million in natural gas revenues, intended to finance projects for Indigenous groups and small farmers, was misappropriated, according to Al Jazeera.

The interior minister in the newly installed right-wing government, Marco Antonio Oviedo, described the former president as 'the principal person responsible' for authorising transfers of substantial amounts into personal accounts of officials for projects that were never completed.

During the hearing, Arce denied wrongdoing and rejected the allegations, insisting that he was not directly involved in administering the fund.

'I'm a scapegoat,' he told the court.

'The accusations are politically motivated.'

His legal team sought his release on medical grounds, citing his past treatment for kidney cancer.

However, Judge Laura dismissed the request and went beyond the prosecution's demand of three months by ordering a five-month detention in a state prison rather than a juvenile facility.

The corruption case first surfaced in 2015, when the Indigenous fund was dissolved amid allegations of misuse.

Investigations later stalled during the years of the Movement Toward Socialism rule.

The probe was revived after conservative President Rodrigo Duterte assumed office last month, ending nearly 20 years of leftist governance, Al Jazeera reported.

Paz had campaigned on a pledge to tackle corruption as Bolivia faces its worst economic downturn in four decades.

His vice president, Edmand Lara, welcomed Arce's arrest on social media, saying that 'everyone who has stolen from this country will return every last cent.'

Former ministers from Arce's administration have condemned the detention.

They described it as political persecution and an abuse of state power against the Movement Toward Socialism party.

If found guilty, Arce could face up to six years in prison. (ANI)