Cayman Islands Premier McKeeva Bush began a second day of questioning from police after being arrested yesterday for misuse of government funds and other charges.

Bush, 57, was taken into custody again today after being released on bail overnight, according to a statement e-mailed by the police. A second man who was also arrested and released on bail as part of the investigation will return for questioning later today, the police said, without providing further details.

Bush, who took office in 2009 and is known as “Father of the House” for his almost three decades of service in the country’s parliament, was arrested for misuse of a government credit card, conflicts of interest and importing explosive substances, according to the statement.

Deputy Premier Julianna O’Connor-Connolly would serve in Bush’s place if he is unable to govern.

The Cayman Islands, a British Overseas Territory which has the highest number of hedge funds in the Caribbean, has historically attracted companies such as Bain Capital LLC and Medtronic Inc., which use subsidiaries based there to lower their tax obligations. The nation was home to 10,979 funds as of Sept. 30, up from 9,258 in 2011, according to the country’s monetary authority.

Bush’s arrest was a surprise, said Chris Duggan, president of the Cayman Chamber of Commerce.

“We were fully aware of the police investigation but we did not know what action, if any, would be taken by the police and when,” Duggan said in an e-mailed response to questions. “The Chamber unequivocally supports the actions by Cayman’s law enforcement officials to root out any alleged unethical behavior that may damage the reputation of the Cayman Islands.”

In a statement, the Chief of Staff to the Premier’s office said that “an occurrence of this nature cuts deep in our small and close-knit community” and called on the Cayman’s 57,000 islanders to reserve judgment.

“Sadly, it is a feature of our society that simply being accused of wrongdoing tends to taint one’s reputation as if one has been proven guilty,” according to an e-mailed statement from the Cayman government yesterday. “Even if subsequently cleared of the accusation, the blemish on one’s name tends to remain.”