Durban - Shabir Shaik, a bidding contractor in the multi-billion rand arms procurement deal, was arrested on Friday morning for possession of classified government documents, said national director of public prosecutions spokesperson Sipho Ngwema.

He was released on bail of R1 000.

Ngwema said Shaik was allegedly in possession of Cabinet minutes in which the arms procurement was discussed, and also correspondence between the departments of Public Enterprises and Defence.

Ngwema said Shaik was a bidding contractor, competing with other contenders, yet he had inside information.

"He must explain that in court."

Asked how Shaik might have obtained the documents, Ngwema said: "I don't know, but you know and I know that his brother is in the defence department."

Shaik's brother Shamin "Chippy" Shaik is the head of acquisitions in the Department of Defence.

Shaik will be charged under the Protection of Information Act.

With acknowledgement to Sapa and News24.