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Police confirm raids on IT cos. linked to Pension Fund probe

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Russia's Interior Ministry confirmed Thursday that three IT providers were raided as part of a probe into the misappropriation of $38.18 million allocated to the Pension Fund for computer purchases.
MOSCOW, December 7 (RIA Novosti) - Russia's Interior Ministry confirmed Thursday that three IT providers were raided as part of a probe into the misappropriation of $38.18 million allocated to the Pension Fund for computer purchases.

IT providers IBM, R-Style, and Lanit were raided Wednesday by police conducting an investigation into the Pension Fund, which is suspected of purchasing computers and other equipment from the three companies at inflated prices.

"Some executives in that organization, who are responsible for tenders for the procurement of equipment, conspired with representatives of the commercial firms R-Style, Lanit and IBM to misappropriate the allocated funds," the ministry said.

The ministry said the tenders to choose suppliers were a formality. The three companies supplied electronic equipment at prices far exceeding the average market cost and misappropriated the surplus along with fund officials, the ministry said.

Documents and computers were reportedly seized from the companies and the Pension Fund, which was also raided Wednesday. The Kommersant daily reported that searches were also conducted at the apartments of Pension Fund officials and the companies' executives.

The global provider IBM has declined to comment, but R-Style and Lanit have denied the charges. The Pension Fund has not been available for comment.

The fund's head, who is currently in Chechnya to unveil a new building of the local Pension Fund branch, said that no searches were conducted at his office.

"No action, such as a search of my office, has been taken against me," Gennady Batanov said. "I was at work yesterday, then I presented a budget in the State Duma [lower chamber], and no action was taken at my office or against me."

Batanov said he first heard of the accusations when he was already in Chechnya, and said he was "very surprised."

But he said he knew that a criminal case has been opened over the procurement of office equipment by the Pension Fund, and that the computer firms are also under investigation.

"A criminal case has been opened because a number of businessmen and officials are suspected of failing to draw up contracts scrupulously," he said.

Batanov said he does not oversee procurements, as there are special departments in the Pension Fund, including a tender commission comprising Interior Ministry and FSB officers, which are charged with that responsibility.

Batanov said he was positive the fund did not overspend its 2006 budget, and denounced the Interior Ministry for making accusations before completing its investigation.

This is the third corruption investigation launched in a month against agencies overseen by Health and Social Development Minister Mikhail Zurabov.

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