Croatian police seek tycoon in $6 mln fraud

ZAGREB, Feb 4, 2000 -- (Reuters) Croatian police investigating a $6 million fraud case said on Thursday they were hunting for the country's best-known tycoon after the electoral defeat of the right-wing government alleged to have protected him.

Police officials quoted by the state news agency Hina indicated that millionaire businessman Miroslav Kutle had been under investigation for years but prosecution had been thwarted by his powerful supporters in government.

Zagreb Police Chief Zdenko Senicnjak said "concrete finalization of the police action had to wait for the political situation to change", implying his arrest had been blocked by officials in the ex-ruling Croatian Democratic Union (HDZ).

The HDZ was routed in both parliamentary and presidential elections last month, ending a decade-long grip on power following the death in December of their autocratic leader, President Franjo Tudjman.

Croatia's new center-left government has pledged to crack down on the corruption and cronyism that increasingly flourished under the HDZ's long, monolithic rule.

Zagreb police said on Thursday they had arrested three people but were still looking for Kutle on suspicion of embezzling 48 million kuna ($6 million).

"We have initiated a search for Kutle," Zagreb police spokesman Josip Begovic told Reuters by telephone, adding that police did not know whether he might have left the country.

A spokeswoman for Kutle's Globus Grupa group told Hina that Kutle was not on the run and would report to the police later in the day. But she was unaware of his whereabouts.

Begovic said Kutle was "suspected of inciting" three other officials of the Tisak kiosk operator, part of his business empire born in Croatia's graft-ridden privatization process, to embezzle company funds in 1995-96.

Local newspapers alleged Kutle had pumped cash out of Tisak, pushing it ever further into debt to the point of collapse.

Kutle's name has been linked to a string of bank and company failures or near-failures including Dubrovacka Banka, Diona retail chain, Slobodna Dalmacija newspaper and Tisak.

Senicnjak was quoted by Hina as saying an inquiry into Kutle's business dealings had been going on for years.

The amount of cash thought to have been drained from Kutle's various firms exceeded 200 million kuna, he said.

Police have arrested several key figures on suspicion of fraud, including former Tourism Minister Ivan Herak, since the center-left victory in the January 3 general elections.