Ethiopia has detained the former head of a large military-run industrial conglomerate, a day after the country's attorney general disclosed that several hundred million dollars was embezzled from the firm.

The state broadcaster ETV reported that Maj. Gen. Kinfe Dagnew, former head of the Metal and Engineering Corporation, was arrested near the Sudanese border where he was trying to flee.

The arrest is viewed as a direct hit on Ethiopia's military establishment, the latest of several major changes implemented by reformist Prime Minister Abiy Ahmed, 42, since he came to power in April.

Images of the former official in handcuffs arriving by helicopter in the capital, Addis Ababa, have been aired repeatedly by the state broadcaster. The news of Kinfe's arrest has captured the attention of many in this East African nation as he was one of the most feared figures in the country until a few months ago.

"He was a dictator who was not willing to solve our problems," Desalegn Kebede, who did business with him, told the Associated Press. "I'm very happy that he is now under custody. We hope that he will get what he deserves."

Ethiopia's Attorney General Berhanu Tsegaye stated on Monday that 27 suspects were arrested from the military-run company on allegations of corruption. He alleged that an estimated $2 billion worth of procurements were made without an open tender.

In addition, a further 36 individuals were apprehended for alleged human rights violation.

The previous government of Ethiopia, a close security ally of the West, was often accused of rights violations by international groups and activists. Abiy's new government has carried out several reforms including releasing several thousand political prisoners, permitting opposition groups to return from exile, dropping terror charges against prominent opposition leaders and relaxing restrictions against the media.

But still ethnic-based clashes have broken out in some parts of the country and pose the most serious threat to Abiy's leadership of Ethiopia's 100 million people.