Star Online said Lim Keat Seong was also escorted by Malaysian Anti-Corruption Commission (MACC) officials to two homes where documents were seized.
These were in Sungai Pinang and his own apartment in Green Garden, Paya Terubong. Neighbours at Green Garden said Keat Seong stayed there with his son and daughter-in-law.
Star Online said the senior Lim was handcuffed when MACC officials took him out of the building at 6pm.
MACC had been looking for Keat Seong following the release of a secretly-taped video apparently showing him being confronted by disgruntled would-be buyers who claimed to have paid money to get affordable housing units from the state.
Siew Khim however has distanced herself from the racket and emphasised that her father had no power to decide on who should get houses.
Keat Seong was detained when he presented himself at the MACC office at 1pm today.
The news portal said Penang MACC Director Abdul Aziz Aban said the 67-year-old Keat Seong was later taken to a clinic for medical attention when he said he was feeling unwell.