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Russia ex-official investigated in EBRD bribe case

Source: Thomson Reuters Foundation - Thu, 3 Feb 2011 19:04 GMT
Author: (c) Copyright Thomson Reuters 2011. Click For Restrictions. http://about.reuters.com/fulllegal.asp
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(c) Copyright Thomson Reuters 2011. Click For Restrictions. http://about.reuters.com/fulllegal.asp
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* Ex-official alleged to have demanded 1 million euro bribe

* British police investigating Russian EBRD officials

* Junior official held on suspicion of money laundering

(Adds details of case against former EBRD director)

By Thomas Grove and Maria Tsvetkova

MOSCOW, Feb 3 (Reuters) - Russia&${esc.hash}39;s former representative at the European Bank of Reconstruction and Development is being investigated on suspicion of demanding a 1 million euro bribe from a Russian company, investigators said on Thursday.

Police in Britain and Russia are investigating Yelena Kotova, who was dismissed in December as Russia&${esc.hash}39;s former representative to the board of the London-based bank, and at least four other members of the Russian delegation.

"The decision has been taken to open a criminal case against Kotova," Alexander Matveyev, deputy director of the Russian Interior Ministry&${esc.hash}39;s investigative department, told reporters. He said Kotova was in Moscow and had not yet been detained.

Irina Dudukina, a spokeswoman for the department, said Kotova was suspected of demanding a bribe from an unidentified Russian company to secure a loan from the bank.

"We&${esc.hash}39;re talking about a sum in the area of 1 million euros," she said.

Kotova, who used to work at Moscow bank VTB, could not be reached for immediate comment.

British police said on Thursday a 26-year-old junior member of the Russian EBRD delegation had been arrested on suspicion of laundering money.

The corruption allegations are an embarrassment to both Russia and the EBRD, which was established as the Soviet Union crumbled to help the transition of former communist countries to the free market.

Investors say corruption as one of the biggest hindrances to doing business in Russia, which is ranked by Berlin-based graft watchdog Transparency International as more corrupt than any other country in the Group of 20, putting it on a par with Cambodia and Laos.

EBRD DIRECTOR

Kotova was appointed to the EBRD board by the Russian government and represented the interests of Russia, Belarus and Tajikistan from July 2005 to late 2010, when she was sacked by Prime Minister Vladimir Putin&${esc.hash}39;s office.

The EBRD, which invested 2.3 billion euros (${esc.dollar}3.17 billion) in Russia in 2010, has never before lifted the immunity of a board member. Its investments in Russia have been in the automobile, retail, banking and energy industries.

It was unclear what the corruption allegations related to, but Matveyev said the investigation was focusing on bribery linked to industrial projects in Russia.

He did not comment on an investigation into other Russian officials who worked at the EBRD, although the Economy Ministry said last month that one was under way.

"From our point of view the most important thing is that we applied our own code of conduct to this issue as soon as we became aware of a problem," an EBRD spokesman said.

"(We) conducted our own investigation and -- as laid down in that code of conduct -- dealt immediately with the Russian authorities and then immediately cooperated with the UK authorities as soon as they said they too were investigating." (Reporting by Thomas Grove, Maria Tsvetkova and Douglas Busvine, Additional reporting by Stefano Ambrogi, Writing by Guy Faulconbridge, Editing by Steve Gutterman and Andrew Dobbie)

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