Questions for Deneuve on 'cash for friendship' with Algerian tycoon

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Catherine Deneuve faces questioning by a French magistrate on the actress's alleged "friendship for cash" with an Algerian millionaire whose mysterious financial empire collapsed last year.

The actor Gérard Depardieu and a gaggle of other French and international stars have also been accused of taking payments in cash or kind to appear at social events hosted by Rafik Abdelmoumene "Moumen" Khalifa, 38, who is sought in Algeria for alleged fraud and money-laundering.

Mr Khalifa is the subject of an Interpol arrest warrant and is believed to be living in London. Britain has no extradition arrangements with Algeria.

Mr Khalifa's former right-hand man, Mohammed C, has told French investigators that the businessman gave Deneuve, 61, an envelope containing €40,000 (£28,000) in cash to appear at a glittering party in his villa in the hills above Cannes in September 2002.

Earlier that year, she was allegedly given €45,000 to turn up at a football match between Algeria and a France XI in Algiers, sponsored by Mr Khalifa. Deneuve was not previously known to be a football fan. According to a statement made to investigators by Mohammed C, other show business personalities were paid, according to their celebrity, to attend functions hosted by the young Algerian tycoon. French intelligence services have suggested that the whole operation was a front for powerful figures within Algeria.

The party at his villa near Cannes in September 2002 for the abortive launch of Khalifa TV was attended - among others - by Depardieu, Bono, Sting, Claudia Schiffer, Naomi Campbell, Melanie Griffiths, Pamela Anderson and the former French culture minister, Jack Lang.

French investigators have no specific evidence that the other guests were paid to be there. Depardieu, who became a close friend of the millionaire, has denied taking cash payments but is now accused of making frequent use of the tycoon's private plane.

According to Le Parisien newspaper, expanding on information leaked in September to the magazine L'Express, Mohammed C told French investigators: "Khalifa asked me to go and fetch this envelope from his bedroom. I knew that the envelope was meant for Catherine Deneuve, to pay her for her presence at the party.

"Cash was given by Rafik Khalifa to celebrities who came along. The sum varied, according to how big the person was, from €300 to €40,000. Catherine Deneuve got €45,000 for going [to the football match] and €40,000 for coming to the party. Depardieu was given no cash but used Khalifa's jet."

Taking money to appear at parties is not, in itself, illegal. However, Deneuve and Depardieu face questioning by the magistrate, Isabelle Prévost-Desprez, who is looking into the Khalifa empire, which appeared from nowhere seven years ago and collapsed in February-April 2003, leaving debts in Algeria and France estimated at up to €1,000m.

Much of this money is believed to have been embezzled from the 200,000 small businesses and individuals in Algeria who were attracted by exorbitant interest rates to place their investments in the Khalifa bank. Under French law, individuals who benefit from the pillaging of a company can be prosecuted.

Deneuve has refused to comment on the allegations.