Serbia Ministry: Mobtel Subject Of Fraud Probe

BELGRADE -(Dow Jones)- Serbian authorities have found evidence mobile telephone operator Mobtel committed fraud and failed to pay the state hundreds of millions of euros in dividends it should have received, the interior minister said Tuesday.

Dragan Jocic said in an interview with the Beta news agency that the state, which is officially the 49% owner of Mobtel, hasn't received any money from the company since it was established in 1994.

The investigation will be of concern to a group of Austrian investors, led by businessman Martin Schlaff, who bought a 51% stake from the state's former Serbian partner in Mobtel, Bogoljub Karic. The size of Karic's stake itself is a matter of dispute.

Jocic said Mobtel sold its rights to operate in the Kosovo province to a company called Mobikos without receiving the required approval from the Serbian cabinet.

Authorities last week revoked Mobtel's operating license over the Kosovo deal and Monday issued a search warrant on Patrick Harpur, who served as Mobtel's managing director from mid-2003 to May 2005. Mobtel is officially operated by the partially state-owned Telekom Srbija.

Jocic said the Mobtel case is one of the country's biggest-ever economic crime investigations.

Harpur Monday denied selling a license to the Kosovo company, saying the companies only reached an agreement on technical cooperation, according to the Associated Press. He didn't reveal his whereabouts to the news agency or say whether he would talk to investigators.

Agency Web site: www.ceemarketwatch.com

(END) Dow Jones Newswires "

Posted to the site on 3rd January 2006