SWITZERLAND - The head of asset management for the canton of Zürich pension scheme has been sacked after 20 years in government service after the regional government said its trust in him had been "damaged".

Ursula Gut-Winterberger, head of Zürich's financial department, said: "Based on the statements made by the head of asset management, and given the considerable and repeated exploitation of the official position for private purposes, employment is inconceivable. 

"Trust in his holding a managing position with major responsibilities has been destroyed beyond repair."

The canton's government made the decision after the public prosecutor forwarded a confidential status report to Gut-Winterberger.

In a press release, the financial department emphasised that the arrested head of asset management had agreed to this forwarding.

Gut-Winterberger also confirmed that he had been reported after she received a tip-off from within the financial department about "possible wrongdoings". 

The canton's financial department said it had not yet decided which external department would lead the investigation - to be conducted in addition to a criminal investigation carried out by the public prosecutor - as "very complex connections" would have to be looked into.

The head of asset management remains in custody.