The man’s son and a leading fish trade in Chilaw too, have been taken into custody.
The businessman is said to be a patron of the traders’ association at the fish market, and his son is its treasurer.
The trader from Chilaw is said to be a key heroin smuggler through Puttalam and Chilaw seas.
They were exposed following a lengthy investigation into the telephone conversation of underworld leader Makandure Madhush, who is in hiding in Dubai.
Police also got a lead on him during an operation following a tip-off that more than 100 kilos of heroin were being smuggled in from Pakistan by trawler.
The contraband was loaded in the Maldivian waters to a small fishing vessel.
Police patrolling the Dondra seas found the fishing vessel left abandoned.
Then, the Chilaw businessman was arrested.