RUSSIA: Home of state telco chief searched in fraud probe

Russian investigators searched the home of the head of a state telecoms firm on Tuesday in a fraud probe, the latest of a string of scandals that is increasingly coming to characterise Vladimir Putin's six-month-old presidency.

Investigators searched the house of Alexander Provotorov, the chief executive of Rostelecom, and the home of a minority shareholder, Konstantin Malofeyev, newspapers and news agencies reported, citing law enforcement sources.

VTB, Russia's second largest bank, has secured a British court injunction to freeze part of the 10% stake in Rostelecom owned by Malofeyev's fund, Marshall Capital Partners, to try to recover a $225-million loan from its British unit, the reports said.

News of the searches broke the day before Rostelecom – one of four firms to win licences to provide fourth-generation mobile services – reports quarterly results. Shares in the firm, in which the Russian state owns a voting stake of 53%, fell by 3.6%.

According to the reports, Malofeyev has been taken into custody and Provotorov may be arrested later on Tuesday. A lawyer for Malofeyev's fund, Marshall Capital, was being questioned in relation to the case.