In a statement released on Thursday, the company explained that Bakhshi was subject to a criminal investigation that was not related to his role at Manx Telecom.
Reports from the FT suggested that Mr Bakhshi appeared before the Isle of Man's Court of Justice on Tuesday, over allegations of his involvement after a Class B substance from Amsterdam was intercepted by a customs official.
“In accordance with company procedure, the board has suspended Mr Bakhshi on a precautionary basis pending investigations being carried out,” a statement from Manx Telecom read.
“The board will keep his suspension under review and will aim to make the period of suspension no longer than is reasonably necessary,” it added.
During his suspension, chief executive officer Gary Lamb will step in to act as interim CFO.
Bakhshi originally joined the telecoms company in 2015 after spending two years as executive commercial director at Virgin Media.
Previously, he had spent a number of years working at both Vodafone and British Telecoms.