Mohamed Aliyar, 60, is the founder of the Centre for Islamic Guidance, which boasts a mosque, a religious school and a library in Zahran's hometown of Kattankudy, a Muslim-dominated city on Sri Lanka's eastern shores.
"Information has been revealed that the suspect arrested had a close relationship with ... Zahran and had been operating financial transactions," said a police statement late on Friday.
The statement said Aliyar was "involved" with training in the southern town of Hambantota for the group of suicide bombers who attacked hotels and churches on Easter, killing over 250 people.
Two Muslim community sources in Kattankudy told Reuters his hardline views were partly shaped by ultra-conservative Salafi-Wahhabi texts that he picked up at the Centre for Islamic Guidance's library around 2-3 years ago. The sources are not affiliated with the center.
"I used to always run into him at the center, reading Saudi journals and literature," said one of the sources.