Moscow's ousted mayor questioned in fraud case

15th November 2011, Comments 0 comments

Moscow's toppled mayor Yury Luzhkov arrived Tuesday for questioning as a witness in an investigation into a city bank that he founded and that allegedly gave his wife a fraudulent loan.

"Luzhkov is already inside. The questioning will last at least three hours," the ex-mayor's lawyer Genri Reznik told journalists gathered outside the police investigators' offices.

President Dmitry Medvedev humiliatingly sacked the long-reigning mayor in September 2010 after a televised campaign highlighting alleged corruption and favours to Luzhkov's wife, construction magnate Yelena Baturina.

The 75-year-old had ruled as mayor from 1992, with massive public support when re-elected in contested polls. Now the post is directly appointed, and he was replaced by a taciturn Kremlin loyalist, Sergei Sobyanin.

The Bank of Moscow finance house that Luzhkov founded and used as the heart of the city's real estate and other business operations was raided within months of the mayor's replacement.

Its executives now stand accused of using city budget money in 2009 to issue a 13 billion ruble ($420 million) loan to a shell company that ended up buying a property at an inflated price from Baturina's construction business.

Luzhkov and Baturina have spent most of their time abroad since the mayor was ousted, with Baturina fleeing to Austria after crack police forces raided the offices of her Inteko firm in February.

Baturina admits that Inteko used the proceeds from the property sale to cover immediate debts and stay afloat for several more months. But she argues that the loan was legal and the intermediary company legitimate.

Luzhkov, who presided over the regular breaking up of opposition rallies by riot police while in office, has given virulent interviews complaining of Stalinist-style repression against him.

But he had insisted that he would return for questioning in the probe, despite wide speculation that he risks being transformed from a witness to a suspect, and his lawyer remained bullish on Tuesday.

"It is not Luzhkov's case. It's the Bank of Moscow's case, and he's just a witness. I'm here as a witness's lawyer," Reznik said, adding that his client was "in an excellent mood."

© 2011 AFP

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