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. Last Updated: 07/27/2016

Investigators in Kiev Visit Naftogaz Office

Ukrainian Security Service agents have searched the offices of state energy company Naftogaz Ukrainy as part of a wider investigation into possible illegal gas trading from Turkmenistan to Ukraine, Naftogaz said Friday.

"Our offices have been searched in connection with an investigation into alleged smuggling of Turkmen gas in 2003," Naftogaz spokesman Dmitry Marunich said by telephone from Kiev. "Investigators have been in and out for several days."

Marunich said the searches appeared to be linked to former management of Naftogaz and had nothing to do with the company under its current management, which was appointed in early January by Ukraine's new leadership following the Orange Revolution.

In 2003, the Turkmen gas trade was managed by Eural Trans Gas, a company registered in Hungary one day after Russian gas giant Gazprom granted it the rights to sell billions of dollars' worth of gas from Turkmenistan to Ukraine.

According to Hungarian court papers, Eural TG was owned by three Romanians with no business experience and Israeli lawyer Zeev Gordon, whose clients include Semyon Mogilevich, who is wanted by the FBI and is widely considered to be a major figure in international organized crime.

SBU chief Oleksandr Turchinov said in a July interview with the Financial Times that his agency was investigating possible links between current and former Turkmen-Ukraine gas traders with Mogilevich.

Through Gordon, Mogilevich has denied any ties with Eural Trans Gas or with its successor Rosukrenergo, an Austrian-registered entity 50-50 owned by Gazprombank and a subsidiary of Raiffeisenbank, Raiffeisen Investment AG, which holds the shares on behalf of unnamed beneficiaries.

Rosukrenergo took over the sale of gas from Turkmenistan to Ukraine on Jan. 1, 2005, following investor concerns about the Eural TG arrangement.

Both Raiffeisen Investment AG and Gazprom have rejected the suggestion that the trading companies could have ties to organized crime.

Gazprom spokesman Sergei Kupriyanov could not be reached for comment over the weekend.

In the past, Gazprom has insisted it was forced to bow to the former Ukrainian government's wishes over trading arrangements. Gazprom has said the appointment of Eural TG was the prerogative of the government of former Ukrainian President Leonid Kuchma. Under the Rosukrenergo deal, the 50 percent not held by Gazprom was represented by Naftogaz managers, Kupriyanov has said.

Some members of Naftogaz's former management have been called in for questioning as part of the current investigation, said a source familiar with the situation, who requested anonymity because of the ongoing probe.

A spokeswoman for the Ukrainian Security Service could not confirm whether this was the case.

The same source said last month that two former senior Naftogaz managers held seats on the supervisory boards of Rosukrenergo. Konstantin Borodin, Naftogaz's former spokesman, could not be reached for comment.