Qatar’s finance minister has been arrested for questioning over allegations of abuse of power and the misuse of public funds, in an unprecedented move by authorities in the gas-rich Gulf state as part of its drive to boost transparency and clamp down on corruption.

The public prosecutor has opened an investigation into allegations of embezzlement by Ali Sharif al-Emadi, according to a statement carried by the state news agency.

Emadi, who assumed the post eight years ago and is one of the Gulf state’s most high-profile officials, has not been charged. The allegations relate to bribery and commissions relating to government contracts, said one person in Doha briefed on the investigation.

The investigation is focused on Emadi’s ministerial conduct, rather than the US-educated former banker’s other positions, the person added. Emadi is also a board member of the Qatar Investment Authority, the state’s influential sovereign wealth fund that manages about $300bn of assets, and chair of Qatar National Bank, the country’s largest lender.

Qatar, run by the al-Thani ruling family, is one of the world’s wealthiest countries and is due to host the football World Cup next year. The sheikhdom, which hosts the US’ regional military headquarters, is a Gulf monarchy that nonetheless backed pro-democracy Islamist movements during the 2010/11 Arab uprisings, riling its neighbours.

The emir, Sheikh Tamim bin Hamad al-Thani, has made fighting corruption a theme of his rule since his father abdicated in 2013. “Development can achieve its objectives only through good governance, the rule of law, combating corruption and injustice,” he said in a 2017 speech.

The arrest “is very unusual — previous ministers pursued for corruption were never served arrest warrants”, said one Doha-based western observer. “They were not pursued until after their term was up — and it was always kept secret.” Doha was buzzing with the shock news on Thursday, especially as Emadi was “very powerfully connected”, the observer said, though budget cuts had made him unpopular.

The arrest comes as the emir prepares the country for long-delayed elections in October. The poll will be for an advisory body that acts as a proxy parliament. Qatar has also been keen to promote better governance as it gears up to host the World Cup. The country’s reputation has been hit by allegations of bribery and worker abuse linked to its hosting of the football tournament.

Qatar ranks 30th on Transparency International’s 2020 corruption perceptions index, tied with the Bahamas and ahead of Spain. The only country in the Middle East viewed as less corrupt is the United Arab Emirates.

Transparency rose up the state’s agenda during the trade and travel embargo against Qatar led by Saudi Arabia in 2017, which was resolved in January. The government is determined to act more openly in the handling of these high-profile cases, the person briefed on the investigation said.