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Russian shares probe could signal action against tycoon: media
July 15, 2003

Russian prosecutors Tuesday reopened an investigation into an alleged illegal share purchases deal involving the company of one of the country's leading tycoons.

The move is part of a widening fraud probe that has already targeted other top business leaders and according to media reports the probe could trigger legal action against tycoon Oleg Deripaska.

The state prosecutor's office said it was re-examining the case of the purchase of shares by a group of firms including Deripaska's holding company Basovi Element on the grounds of possible irregularities.

The case, which also involves insurers Ingosstrakh and other companies, had previously been suspended.

The 2001 acquisition of shares in Ingosstrakh, the bank Avtobank and the steel-makers NOSTRA "was carried out in a non-objective manner and did not follow the recommended procedures," prosecutors said.

Officials made no specific mention of Deripaska, but press reports were quick to link the re-opening of the case with on-going tax evasion investigations at oil firms Yukos and Sibneft, headed respectively by moguls Mikhail Khodorkovsky and Roman Abramovich, amid rumours that the privatisation of state-owned firms in the 1990s could be re-examined.

"It can't be ruled out that this renewed investigation will turn against Deripaska," the liberal Gazeta commented.

The daily noted that the case had been reopened at the instigation of a businessman, Andrei Andreyev, who complained that he had been pressurised into selling his holding in Ingosstrakh and the other firms at a price well below their true value.

In addition to Khodorkovsky and Abramovich, the head of the Menatep bank Platon Lebedev, a leading shareholder in Yukos, has been charged with fraud over a 1994 acquisition of shares in a state-owned fertiliser company.

A probe into Basovi Element could "mark a further step towards a redistribution of property" owned by firms that were created during the 1990s privatisation, Gazeta commented.

Basovi Element said in a statement on July 1 that investigations into its share purchases had been closed.

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