A Donegal businessman and a bodyguard from Northern Ireland are in police custody in Monte Carlo in a dispute over a multimillion euro deal which appears to have gone wrong.
They were held by police in the principality six days ago.
The arrests are understood to have followed exchanges between the men and Monte Carlo-based entrepreneurs over a €38 million investment.
The Donegal man who is in his 30s, is said to have put up to €3 million of his own money into the investment.
The rest was provided by a consortium of Irish businessmen.
It is understood that the Garda is assisting the authorities in Monaco.
One businessman with some knowledge of the deal said the Donegal man flew out last Thursday to get to the bottom of it. He brought an acquaintance from Irvinestown for security.
The Department of Foreign Affairs said an Irish citizen was under arrest in Monte Carlo. They believed another person, probably from the North, was also being held.
A spokeswoman said "every consular assistance" was being given to the Donegal man and his family. However, no further details were disclosed.
A brother of the Donegal businessman is also believed to be in Monaco though he is not in custody.