Serbian tycoon arrested in corruption case

(BELGRADE) - Police arrested Serbia's richest tycoon on Wednesday in a major sweep launched under the government's campaign to root out corruption, a key condition in its bid to join the European Union.

After questioning him twice this month, police arrested Miroslav Miskovic, one of the most influential businessmen in the Balkans who had close links with late strongman Slobodan Milosevic, along with eight other people including his son.

Miskovic, 67, is suspected of illegally gaining more than 30 million euros ($39 million) during the privatisation of several state-run companies engaged in the road construction business, police said.

During his arrest, police said he threatened Deputy Prime Minister Aleksandar Vucic, who is in charge of the fight against corruption and organised crime, prompting the authorities to introduce tough security measures around Vucic.

Miskovic, whose wealth is estimated at around three billion dollars by local media and who has often been fingered as a suspect by the government's graft-fighting council, was later questioned by the organised crime prosecutor.

The nationalist government that took over after elections in May has pledged a "merciless fight" against corruption and organised crime in Serbia which was given EU candidate status in March but is struggling economically.

"The state is more powerful then anyone," Vucic told state news agency Tanjug, brushing off Miskovic's threats. "The most important thing is that there are no untouchables in Serbia."

Miskovic made his fortune in the 1990s, using his close relations with Milosevic's regime to win lucrative contracts at a time when Serbia was under international sanctions over its role in the wars over the break-up of the former Yugoslavia.

Over the last decade Miskovic -- who made the Forbes list of the world's rich in 2007 -- has expanded his vast Delta Holding empire, which includes real estate, food production, retail and insurance, throughout the region.

Local media have speculated for years about his influence on Serbian politics and ties with top-level politicians which he allegedly used to obtain the best deals for his business.

"Miskovic's case is a media bombshell, but we have to wait for its epilogue and judicial verdict," said political analyst Sasa Popov of the think-tank Igmanska inicijativa.

Vladimir Goati of the Serbian branch of Transparency International, said the "proper fight against corruption includes a justice system capable of following it through".

"I cannot judge an anti-graft campaign based on the arrest of a single tycoon," Goati told AFP.

The new government has so far launched a probe into the dealings of two former ministers who are now in opposition, and a number of businessmen. But no charges have yet been laid against them.

Both Vucic and President Tomislav Nikolic said last month they had targeted very powerful men suspected of having links with organised crime and corruption, and have reportedly been the subject of death threats.

The link between organised crime and politics in Serbia has for years been the most serious obstacle to the country's bid to get closer to the EU.

Serbia's reformist prime minister Zoran Djindjic was shot dead by a sniper outside his office in 2003 just ahead of launch of a major operation against organised crime. His murderers, among them ex-members of a special Serbian police unit, were sentenced to lengthy jail terms.

Delta Holding is one of the biggest companies in the Balkans, employing more than 7,000 people. But Miskovic has slowly begun to sell some of his businesses, notably supermarket chain Delta Maxi to Belgium company Delhaize for almost one billion euros in 2011.

On Wednesday, the company said in a statement it would continue "with its activities" and voiced hope for a "judicial solution based on evidence and facts".