RUSSIA:Russian prosecutors are to investigate what they claim are major financial irregularities in the Chukotka region which is run by Chelsea Football Club owner Roman Abramovich, the country's Audit Chamber said yesterday.
The Audit Chamber declared the remote Arctic province bankrupt.
The watchdog accused Chukotka's administration of misspending the equivalent of about £30 million (€45 million) in 2003, and said the region had awarded hundreds of millions of euros in tax breaks to local companies, many of which are linked to the Sibneft oil firm at the heart of Mr Abramovich's fortune.
The report emerged as the only Russian richer than Mr Abramovich - oil baron Mikhail Khodorkovsky - was called for trial on fraud and tax evasion charges on May 28th. He was arrested last October in a perceived warning from the Kremlin to the powerful "oligarchs" who made their billions in the rigged privatisations of the 1990s.
Asked if he thought Mr Abramovich could "sleep easy at night", auditor Sergei Ryabukhin said: "I think the prosecutor will make the final decision on that." He went on to suggest that there was little evidence of criminal activity in Chukotka's account books, citing as the main problems the overpayment of wages to regional officials and "mistakes and systematic errors in budget planning."
A spokesman for Chukotka said the region had been technically bankrupt for years before Mr Abramovich took power in 2001, and that its debts had decreased and been restructured under his control.
He also insisted that firms that benefited from tax breaks in Chukotka had ploughed more money into the region than they saved on tax.
Audit Chamber chief Mr Sergei Stepashin has criticised Mr Abramovich's purchase of Chelsea and his lavish spending on players. But Mr Ryabukhin denied that sport or Kremlin pressure had influenced his accountants. "I love football, but it's not part of our programme of oversight. Football and politics are not part of my remit."
President Vladimir Putin, asked about Mr Khodorkovsky's case yesterday and what signal his possible prosecution might send to Russians and Western investors, said prosecutors were merely upholding the law.
"The main signal here is that one must not steal," Mr Putin told reporters after an EU-Russia summit. "Everyone must obey the law, regardless of one's position or how many millions or billions one has in personal or corporate accounts. All must be equal before the law," he said.