David Matthews is alleged to have carried out the attack between 1998 and 1999
A spokeperson for Matthews said he 'categorically denies the allegation and unequivocally contests the untrue and scandalous accusation'
Matthews is under investigation for one attack in Paris and another in St Barts
He was arrested at Paris Orly airport on Tuesday and has been released on bail
He is the father of James Matthews, 41, who is married to Pippa Middleton, and also of Made in Chelsea star Spencer Matthews
The multi-millionaire father-in-law of Pippa Middleton has been released on bail in Paris after he was accused of raping a minor.
David Matthews, 74, is alleged to have carried out the attacks on a teenage girl between 1998 and 1999. He is accused of one attack in Paris and another in St Barts.
A spokesperson for the family said: 'David Matthews categorically denies the allegation and unequivocally contests the untrue and scandalous accusation.'
An alleged witness is said to have reported him to the police in 2017, leading to Matthews reporting to judges in the French capital on Tuesday.
He is being investigated by French authorities and is currently 'mis en examen'.
David Matthews (right), pictured with James Matthews and Pippa Middleton after their wedding in Surrey last year
There is no precise equivalent in the British legal system but it is most similar to a charge, with authorities now having six months to decide whether he will be brought to trial.
Citing legal sources, French national news agency AFP said Matthews was now under investigation for the 'rape of a minor by a person with authority over his victim'.
Matthews has now been released on bail, subject to undisclosed conditions. It is not known whether he has retained his passport, or whether he can travel home.
He was first arrested on arrival at Paris Orly airport last Tuesday, and placed in custody at the Brigade for the Protection of Minors. He denies any wrongdoing.
Matthews, who lives permanently on St Barts with his wife Jane, 70, originally spent a full 48 hours in custody in Paris - the maximum allowed under French criminal law before charges have been filed.
The Juvenile Protection Brigade (BPM) building IN Paris where David Matthews was questioned by Police
The rape case is being dealt with by the BPM of the Paris judicial police, who arrested Matthews on Tuesday. Pictured: The BPM's building in the French capital
He is accused of two historic sex attacks, one in Paris, and one on St Barts, according to a judicial source.
Matthews is the father of James Matthews, 41, who is married to Pippa, the 34-year-old sister of Catherine, the Duchess of Cambridge, who is married to Prince William.
James's brother Spencer Matthews made his name on British reality TV show Made in Chelsea.
The rape case is being dealt with by the Juvenile Protection Brigade (BPM) of the Paris judicial police, who arrested Matthews on Tuesday. An official said on Friday that David Matthews was questioned three days earlier by special police handling cases involving minors.
The Paris public prosecutor's office opened a judicial investigation, overlooked by an examining magistrate, a source said.
The allegation will now be subject to a judicial investigation and authorities in Paris now have six months to decide if Matthews will be brought to trial. He is currently 'mis en examen'.
David Matthews attends the wedding of Pippa Middleton and James Matthews at St Mary's Church in Berkshire, England, last year
David Matthews, 74, is alleged to have carried out the attacks between 1998 and 1999. Pictured right: Spencer Matthews
Matthews is a self-made multi-millionaire who grew up near Rotherham and started his professional career as garage mechanic.
After leaving school, he started work as an apprentice mechanic at his father Wallace's garage.
Aged 19, he started selling cars door-to-door and, in his spare time, indulged his love of motor racing at the local track. A skilled driver , he became division champion in the British Touring Car Championships in 1971.
But his dream ended in August 1973 in a catastrophic accident during a race at Silverstone. His car flipped at 130mph, killing one driver, critically injuring another and temporarily stopping Matthews' heart.
A bystander said: 'It was horrific. His car was airborne. How Matthews escaped is beyond me.'
After several successful years in business, Matthews retired after the recession and ventured into hotels, snapping up the Eden Rock (pictured) in St Barts in 1995
Matthews is a self-made multi-millionaire who grew up near Rotherham and started his professional career as garage mechanic
He married Anita Taylor, a fellow driver. The couple had a daughter called Nina together but divorced in 1969. Matthews was forced to retire in 1973 due to major injuries.
Matthews then focused on transforming a used-car enterprise into a large dealership, Kirkby Central Group.
Two years later, just before Spencer's birth, Kirkby Central was the subject of a £8.5 million takeover by Plaxton's, a firm which made buses and coaches.
He then met his second wife, Rhodesian-born artist Jane Parker. Moving out of a bungalow in Rotherham, they lived on a 30-acre, 18th-century estate in rural Lincolnshire, before moving to Paris, then Monaco.
He and Jane Parker had three sons, James, Spencer, and Michael, who tragically died when he was just 22 on an expedition up Mount Everest.
After several successful years in business, Matthews retired after the recession and ventured into hotels, snapping up the Eden Rock in St Barts in 1995, which he moved into and revamped.
David Matthews, 73, pictured with his wife Jane, was arrested in Paris on Tuesday
The Eden Rock hotel was wrecked and strewn with rubble after a devastating encounter with Hurricane Irma last year
Fancying a new challenge, at the age of 52, David moved in with his wife and eight-year-old Spencer, while the other children were already pursuing careers in Europe, and devoted his energy and money to restoring it to its former splendour.
The hotel - a hotspot for celebrities including Tom Hanks, Jessica Alba and Jennifer Lopez - also became a holiday destination for Pippa and James.
Matthews described the hotel, whose priciest suites cost £25,000 and which was visited in the 50s and 60s by guests including the Rothschild and Rockefeller families, as not just a hotel 'but a way of life'.
But it was wrecked and strewn with rubble after a devastating encounter with Hurricane Irma last year.
Matthews also owns the 10,000-acre Glen Affric Estate in the Scottish Highlands, which opened in 2012 as a luxury hunting lodge, offering guests deer stalking, whisky tasting and helicopter rides. Transfer of the title deeds made Dave a Scottish laird.
Despite their rags to riches story, the family's life has been marred by tragedy. Their son Michael was just 22 when he tragically died after reaching base camp of Mount Everest.
Mike died following bad weather in Nepal when he was on his way back down the mountain, in 1999.