'Corrupt' Russian linked to Serb in funding controversy

Click to follow
The Independent Online
The Serb who gave thousands of pounds to the Conservatives is in business with a Russian at the centre of a $2.5m corruption scandal in Moscow.

Zoran Tancic, whose donation is being investigated by the Tories, is closely linked to Valeri Lois, the former head of a Russian state-owned metal giant. President Boris Yeltsin was asked to sack Mr Lois after one of Russia's most senior law officers accused him of "channelling state money" into his own pockets.

The latest disclosure comes three days after Jeremy Hanley, the former Tory party chairman who dined with Mr Tancic, sought to deflect the donor's Serbian links by telling the Independent: "Most of the time we talked about his business in Russia and his plans to build a factory in the UK."

At the time the party accepted Mr Tancic's donation, described by officials as "less than pounds 50,000", the Russian was chairman of Mr Tancic's company.

It is not known whether Conservative Central Office knew of Mr Tancic's Russian partner when they accepted the money, but the latest development in the party's funding scandal serves to highlight the dangers of accepting unsolicited donations from foreign businessmen.

The Independent disclosed on Saturday that Mr Tancic, 49, was a director of London-based Metta Trading Ltd with Jovan Zebic, a former Serbian finance minister and now deputy Prime Minister. Mr Tancic's offer of money was accepted by the Tories in December 1994 despite his obvious links to the upper echelons of the Serb government.

One of his fellow directors on Metta Trading - and chairman in 1994 - was Mr Lois, 51, former managing director of Svetmetexport, a formerly state-owned company specialising in the import and export of metals and technology. Mr Lois is now a director of a Metta subsidiary, Exelport, which has major shareholders in Liechtenstien. According to company records, Svetmetexport owns 39 per cent of Metta Trading.

During a programme on Russian television in 1993, Mr Lois was described as a corrupt official by Aleksandr Kotenkov, the head of the state legal administration service.

Describing a deal in which Mr Lois allegedly channelled $2.5m (pounds 1.6m) of state money into a Swiss firm and later received a credit card with no credit limit, Mr Kotenkov said: "... it is one of the examples of a direct channelling of state money into your own pocket."

The programme was intended to explain to Russians new to capitalism why it was wrong for civil servants to align themselves with private companies. Mr Kotenkov produced evidence to show that Mr Lois had entered into a deal with a Swiss firm, Seabeco Metals AG, whose directors were fellow Russians.

"The then Soviet side was represented by Tsvetmetexport led by Valeri Lois," he said. "The so-called foreign side was represented by the company called Seabeco International Ltd, headed by [another Russian]. But then the following decision was taken: to determine that the estimated expenditure on Seabeco Metals AG over 1991-92 should be $2.5m.

"It is quite a sum for a small company, incidentally, with a limited number of managers, just four people ... $2.5m for two years. Not bad."

Mr Kotenkov said a decision was taken to give three of the four, including Mr Lois, the unlimited credit cards. "We say that in accordance with the documents which we have received, this person carried out actions incompatible with the status of a civil servant. We ask the president to take a decision on releasing him from his post."

Mr Lois could not be contacted yesterday. His son, Dmitri, said his father resigned and was not sacked. He also argued that Svetmetexport was a private company which had never been state owned.

"There were government deals and there were orders but it was never state- owned," he said. "This is what people didn't understand ... because of the political changes at the time. There were problems between Yeltsin and people like [Vice President] Rutskoy. It was also because there were very many changes in higher levels of business."

The Tories made no comment yesterday on further claims that they had been warned by MI6 about the source of some Serbian donations in 1992.