GEORGE TOWN: The leader of an extortion gang which targeted contractors and housing developers who have projects in areas like Jelutong and Seberang Jaya, has been arrested.

The 42-year-old was picked up along with his 38-year-old henchman at a pub in Upper Penang Road at about 9pm on Thursday by a police party from the state anti-vice branch.

The gang is said to be involved in numerous cases and had extorted several hundred thousands of ringgit from their victims.

Police have been looking for the man for more than a year but he had fled to Thailand.

He is said to have returned to the state last week.

A check by The Star revealed that more than 10 reports were lodged against the gang on the island over the past year.

The man and his members would beat up contractors and their supervisors if they failed to pay them the protection money.

It is learnt that police managed to arrest the man under the preventive laws a few years back but he was released after 60 days due to technical reasons.

State CID chief Senior Asst Comm (II) Wan Abdullah Tuanku Said said yesterday that the duo have since been remanded by a magistrate's court pending investigations into the extent of their involvement in the reported cases.

"We are investigating them for extortion and also criminal intimidation under Section 385 and Section 506 of the Penal Code.

"The two have been high on the state police's wanted list over the past year," he said.