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A millionaire advisor to Prime Minister David Cameron has been arrested on suspicion of raping a 13-year-old girl.

Doug Richard, 56, was quizzed by police and released on bail.

He strongly denied the allegations in a statement issued through his lawyers.

The married dad, who starred on BBC’s Dragons’ Den in the first two series, has travelled with the Prime Minister on an official government trip to Africa and advised on policy.

American-born Richard has also worked as an advisor to Chancellor, George Osborne.

Richard, honoured by the Queen for his work helping entrepreneurs, was arrested on January 5.

A City of London Police spokesman said last night: “City of London Police detectives arrested a 56-year-old man on January 5, 2015, on suspicion of inciting a child to engage in sexual activity, sexual activity with a child, meeting a child following sexual grooming and rape of a girl under the age of consent.

“He was bailed on January 6 until March 2015.”

Richard issued a statement over his arrest concerning the suspected rape of a child. He said: “I absolutely deny the allegations made about me.

“It would be inappropriate to comment further given that the police are at a very early stage of their

investigation.”

Richard’s association with Mr Cameron goes back to at least 2007, when the then Opposition leader invited the technology entrepreneur to author the Richard Report – a review into the state of small business in Britain.

In 2008, the Californian founded a business loans organisation named School for Startups, alongside the Department for Business, Innovation and Skills.

It won sponsorship from Santander bank and mobile phone firm O2 and operates at universities, including Nottingham, Coventry and Plymouth.

The project then went international – opening a branch in Romania in 2011.

Richard remained an advisor after Mr Cameron entered Downing Street in May 2010.

The Tory leader announced Richard’s business loans company had been selected to take part in a government drive to release £30million of funding to fledgling firms.

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A video uploaded to YouTube shows Richard interviewing George Osborne on a stage at the launch of a project called StartUp Britain.

Mr Cameron was also present at the launch in March 2011.

In July 2011 Richard accompanied the Prime Minister on an two-day trip to South Africa and Nigeria.

He was selected as part of a 25-strong business delegation including then Barclays boss Bob Diamond for the visit which was designed to boost trade in sub-Saharan Africa.

In October 2013, Conservative skills and enterprise minister Matthew Hancock announced that Richard had been again consulted over policy reforms.

(Image: onEdition)

Hancock said at the time: “We asked Doug Richard to review the Apprenticeship system and tell us what was needed to make the British system a world leader.”

Mr Cameron ­personally launched the scheme masterminded by Richard with a photocall at the Mini plant in Oxford.

Richard lives in a luxury £4.5million five bedroom detached house in Cambridgeshire with his wife.

An article from Real Business posted on schoolforstartups.co.uk, the website for Richard’s own firm, describes him as a “multi-millionaire entrepreneur”.

In the 90s Richard made his fortune buying and selling ­software firms in California.

He moved to Britain in 2001 and formed the Entrepreneurs Union, a group set up to push the needs of young businesses.

Richard appeared on the first two series of BBC show Dragons’ Den which began in 2005.

He was one of the original four ‘dragons’ who made investments in small firms after pitches from budding entrepreneurs.

He appeared on the panel alongside health club tycoon Duncan Bannatyne, mobile phones guru Peter Jones and Theo Paphitis, the former chairman of Championship football club Millwall.

Richard failed to successfully invest in the second series and quit the show.

He said: “It’s such a terrible thing this. I did try, they just didn’t take my money. I got bored.”

(Image: BBC)

In 2006 Richard received a Queen’s Award for Enterprise for his work promoting, developing, and helping entrepreneurs.

Such gongs are the highest official awards for British businesses, ­established under Royal warrant half a century ago.

Richard had been an avid Twitter user since joining the social network site in its infancy in 2008.

But the last of his 2,411 tweets was sent on December 28.

Last month he appeared on flagship morning TV show BBC Breakfast when he spoke to business presenter Steph McGovern about government-created ­apprenticeship schemes.

Shortly before he gave a lengthy ­interview to The Guardian newspaper.

In November it was announced that Richard was to be the new chancellor of Teesside University.

Announcing his appointment, the outgoing chancellor, Lord Sawyer of Darlington, said in a statement on

the university’s website: “I am sure that Doug Richard will be an outstanding Chancellor.

“He is influential and well known as an active business leader and successful entrepreneur.

"His national connections and ability to provide inspirational ­guidance and advice will be an asset to the University.”

Richard was due to take office in the early part of this year.