Two arrested in EBRD-related corruption probe - police

LONDON Mon Mar 1, 2010 3:38pm GMT

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LONDON (Reuters) - Two people have been arrested as part of an investigation into overseas corruption allegations following information provided by the European Bank for Reconstruction and Development (EBRD), City of London police said on Monday.

The EBRD said separately in a statement that an employee of its investment unit was under investigation by City of London police in connection with "suspected criminal activities."

Police said a man and a woman were arrested on February 26 and subsequently granted bail. A police spokeswoman declined to comment on where the two arrested people were employed.

"The investigation began after police received information from the European Bank for Reconstruction and Development," police said in a statement.

The EBRD will launch its own internal and external inquiry into the matter, EBRD director of communications Reijo Kemppinen said.

"We will establish a task force...the task force will be chaired by an external expert and coordinated by our internal auditor," Kemppinen said.

Kemppinen declined to give any more details of the police investigation.

The multi-lateral EBRD was set up in 1991 to help former communist countries in eastern Europe adjust to free markets. It invests in 29 economies, focussing mainly on the private sector, and has 61 country shareholders, along with the European Commission and the European Investment Bank.

The EBRD suffered a loss of 746 million euros in 2009.

(Reporting by Carolyn Cohn and Sebastian Tong; editing by Mike Dolan)

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