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Czech Republic: Managers Of Third Largest Bank Arrested

Prague, 30 April 1997 (RFE/RL) - A Prague district court this evening ordered the arrest of the top two managers of the Czech Republic's third largest bank, Investment and Postal Bank (IPB).

Police detained IPB general director Jiri Tesar and his deputy Libor Prochazka early yesterday. The court justified today's arrest, saying the defendants could influence witnesses while at large.

Tesar and Prochazka stand accused of embezzlement and the abuse of commercial information.

The Czech news agency CTK quotes an investigator as saying the accusations concern a suspicious buy-out by IPB of over-valued shares of the Military Projects Institute (VPU). The defendants allegedly paid 180 million Czech crowns last February to a Luxembourg-based firm, at 6000 crowns a share although VPU shares were selling on the Prague stock market for 2500 crowns each.

IPB's board insists its bankers abided by the rules.

The state, through its National Property Fund, has a 31.5 percent share in IPB, which is one of the leading sponsors of Prime Minister Vaclav Klaus' Civic Democratic Party. Two years ago, IPB, headed by Tesar, gave a $2 million (50 million crown) loan to ODS.