Several gruesome video clips shared on social media showed a mob beating the victim while chanting slogans against blasphemy on Friday. Other clips showed his body set ablaze, as well as the overturned wreckage of what was said to be his car.
Many in the mob made no attempt to hide their identity and some took selfies in front of the burning corpse.
On Saturday, police spokesman Khurram Shahzad said up to 120 people were arrested, including one of the main suspects, with raids still continuing.
“Police experts are investigating this case from various angles, including that some factory workers played a religious card to take revenge on the manager,” said Tahir Ashrafi, a religious scholar and special representative of the prime minister on religious harmony, who confirmed the arrests and said some workers had said the manager was “very strict”.
Malik Naseem Awan, a resident and lawyer in Sialkot, a district in central Punjab province about 200km (125 miles) southeast of the capital, Islamabad, where the attack took place, told AFP news agency he was worried about the effect it would have on the country’s image.
“I can’t tell you how embarrassed I am. It would have been different if someone had done this individually but the crowd present there was watching it silently, and no one tried to rescue him,” he said.
The attack has caused outrage, with Prime Minister Imran Khan calling it a “day of shame for Pakistan”.
In the port city of Karachi, civil society members held a protest on Saturday against the lynching of the Sri Lankan national.
The protesters said they condemned the killing and demanded that the government take measures to stop the misuse of the blasphemy law.
“He was killed on the false charges of blasphemy,” said human rights activist, Mehnaz Rehman.
“The people who killed him were people who didn’t want to work and he just asked them to work honestly so they killed him on the pretext of blasphemy. This law is being abused by such people,” Rehman said.
A senior Pakistan official told AFP that Islamabad had been in touch with Sri Lankan diplomats over the incident “and have assured them that all those involved in the heinous crime will be brought to justice”.
Few issues are as galvanising in Pakistan as blasphemy, and even the slightest suggestion of an insult to Islam can supercharge protests and incite lynchings.
Rights groups say accusations of blasphemy can often be wielded to settle personal vendettas, with minorities largely the target.