According to the Financial Times, Fuentes was detained along with a group of other former Guatemalan ministers and ex-President Alvaro Colom.
The media outlet added that the detention took place against the backdrop of the investigation into the corruption scandal over purchases of public buses for the needs of the Guatemalan capital.
"Oxfam does not yet know the nature of formal charges, if any, against Dr. Fuentes Knight. However, he has been entirely open with his Oxfam board and executive that he has been among former officials being investigated as part of a budgetary transaction made by the Guatemalan government while he was finance minister. He has assured us that he has cooperated fully with the investigation in the confidence he did not knowingly transgress rules or procedures," Byanyima said, as quoted by the organization's press service.
The incident with Fuentes is not the first scandal related to Oxfam that has broken out in recent days.
Last week, The Times reported citing its sources that a number of Oxfam workers, including charity's former country director for Haiti, Roland van Hauwermeiren, had been spending time in their official residence with prostitutes. On Sunday, the charity was hit by similar allegations that Oxfam staff had paid women for sex in Chad in 2006. Oxfam's Deputy Chief Executive Penny Lawrence said that she was resigning amid the scandals.